Foxconn is making nothing, hiring few, and the Evers Admin seems to be done with them

After blowing the lid off of any facade that Foxconn might ever have any level of significant jobs in the state with their report last week, Josh Dzieza of the Verge followed up today to tell us that the Evers Administration isn't buying what Foxconn has been trying to sell. Dzieza cites a recent report from the Evers' Department of Administration that indicates Foxconn isn’t going to make much of anything. Instead, it seems to exist more as company/GOP PR than any kind of addition to the state's economy.

A state report on Foxconn’s Wisconsin factory depicts a project gone far off course. The report, issued this month by Wisconsin’s Division of Executive Budget and Finance and obtained through a records request, confirms that the company has not built the enormous Gen 10.5 LCD factory specified in its contract. It also says that the building the company claims is a smaller Gen 6 LCD factory shows no signs of manufacturing LCDs in the foreseeable future and “may be better suited for demonstration purposes.”

The report notes that Foxconn received a permit to use its so-called “Fab” for storage, which The Verge first reported this week. Furthermore, according to an industry expert consulted by the state, Foxconn has not ordered the equipment that would be needed to make LCDs. If the building were to be used as an LCD manufacturing facility, the expert notes it would be the smallest Gen 6 in the world and “would appear to be more of a showcase than a business viable for the long term."

Because the project isn't going to manufacture the large panels that were promised when this scam was first announced in 2017, the Wisconsin Economic Development Corporation (WEDC) has said that they will not pay Foxconn any more state taxpayer dollars, and hasn't come close to being worth the huge state and local investment that was given to the company before 1 person was ever hired.

The project Foxconn has pursued instead, the new analysis says, would not have warranted the record-breaking subsidy package passed by then-Gov. Scott Walker, nor required the infrastructure state and local governments have built to support it. “Taxpayers fully performed their side of the agreement to date, while the Recipients have not,” the report says. In fact, “state taxpayers have spent as much if not more than” Foxconn has on improvements to the company’s supposed manufacturing campus. The Verge previously reported that state and local governments spent at least $400 million on the project, mostly on land and infrastructure the company will likely never need. Foxconn listed approximately $300 million in capital expenses at the end of 2019.

There is no foreseeable way that the Foxconn project will employ anywhere near the number of people it was supposed to under the contract with Wisconsin. At the end of last year, it employed only 281 eligible under the terms of the contract, rather than the 2,080 it was supposed to, or even the 520 it needed to employ to get tax subsidies. By the end of 2022, it was supposed to employ 13,000 workers. And those numbers are going in the wrong direction.

Lots of photo ops, not a lot of results.

Does anyone believe that if Scott Walker was still governor that Foxconn would be held accountable like this? HELL NO! We'd still be hearing about how Foxconn would be rolling out products in a manner of months (conveniently occurring after the election), and Walker's WEDC would handed out tens of millions of our taxpayer dollars to Foxconn to keep the illusion going.

Foxconn reacted to the news of their empty buildings in a predictable manner, complaining that they deserve more cash from Wisconsin taxpayers, and threatening to take their talents elsewhere if they don’t get what they want.

Foxconn said it remains committed to Wisconsin but that WEDC’s denial of subsidies “threatens the good faith negotiations” over a new contract.

A statement the same day from Foxconn founder Terry Gou, however, struck a more ominous tone, linking the future of the project to continued state support and, implicitly, to President Donald Trump’s reelection. “Foxconn will work as a partner with those who treat the company as a partner,” Gou wrote. “Foxconn will remain committed to the completion and continued expansion of our project and investment in Wisconsin as long as policymakers at the federal, state, and local levels remain committed to Foxconn and the very important technology development goals driving the company’s investments, as President Trump has done.”

Oooh, the extra-special job creator claims that he needs us to clap harder or else he'll leave! Well, I think this video speaks for a lot of Wisconsinites these days, Mr. Gou.

There are a whole lot of legitimate Wisconsin businesses that can do a whole lot better than Foxconn, and at a fraction of the cost and aggravation. And in 12 days, hopefully voters in the rest of the US do the same thing that voters in Wisconsin did in 2018, which is to ignore Foxconn’s veiled threats, and boot out the crooked executive that signed off on this PR scam.

Retail sales may still be good overall. But the COVID World makes for huge disparities

Another month of improved retail sales also continued to show the changes in American spending habits in the COVID World. On the positive side, it was a good overall report, which shows consumer spending continued to rise as Q3 2020 ended.

Advance estimates of U.S. retail and food services sales for September 2020, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $549.3 billion, an increase of 1.9 percent (± 0.5 percent) from the previous month, and 5.4 percent (± 0.7 percent) above September 2019. Total sales for the July 2020 through September 2020 period were up 3.6 percent (± 0.5 percent) from the same period a year ago. The July 2020 to August 2020 percent change was unrevised at up 0.6 percent (± 0.2 percent).

Interestingly, overall retail sales are now up 3.7% from where they were in January, the last month before sales began to decline. And core retail sales are also above 0% for the year.

The biggest sector gaining in September was autos and auto parts (up a seasonally adjusted $4.0 billion), continuing strength in that sector that started once the economy reopened in many places in May. There was also a boost from some beaten-up brick-and-mortar sectors such as clothing stores (+$1.9 billion), general merchandise stores (+$1.1 billion) and food services/drinking places (+$1.1 billion).

However, even though clothing stores and bars/restaurants had decent seasonally adjusted gains for September, their level of sales still remain far below where they were in January, and sales at gas stations also continue to be down more than 15%.

On the flip side, while overall retail sales were up by 1.9%, home and garden stores were up only 0.6% for September, non-store retailers such as Amazon.com were up 0.5%, and grocery stores barely rose at all. But don't be fooled by the low growth for 1 month, as it illustrates that these sectors are maintaining the higher levels of business it has drawn since COVID-19 broke out.

This change to home-related purchases and online shopping resulted in news of a significant income tax cut for Wisconsinites this week. How? Because of a bill dealing with online sales that was passed well before COVID World began, and the sector boomed. Here's the Legislative Fiscal Bureau's explanation of that provision.

This memorandum provides information for tax year 2020 on the Department of Revenue (DOR) certification for individual income tax rates(attached to this memorandum).Procedures established under 2013 Act 20, as amended by 2017 Act 368 and 2019 Act 10, require DOR to certify lower tax rates for the two bottom individual income tax brackets to offset the increased sales and use tax collections attributable to remote sellers and marketplace providers.

For tax year 2020, the individual income tax rate reduction is based on the sales and use tax collected from remote sellers and marketplace providers during the 12-month period from October 1, 2019, to September 30, 2020. Under Act 10, the tax reduction is to be divided into two equal components and targeted as rate reductions to the two bottom tax brackets. State law requiresDOR to estimate the amount of additional sales tax collected, determine the amount of the tax ratereductions for the two bottom tax brackets, and certify and report its determinations to the Joint Committee on Finance, as well as the Governor, the Secretary of the Department of Administration (DOA), and the Legislative Audit Bureau (LAB), no later than October 20, 2020. Act 10 required the same procedures to occur in 2019 when determining the tax year 2019 income tax rate reduction.

It was estimated under Act 10 that increased sales and use tax collections from remote sellers and marketplace providers of $119.3 million would be available for income tax rate reductions in tax year 2020. However, a significant amount of taxable sales that had previously occurred in-person shifted to online purchases as a result of the coronavirus pandemic. On October 20, 2020, DOR estimated the increase in sales and use tax collections from remote sellers and marketplace providers between October 1, 2019, through September 30, 2020, was $257.3 million. The estimated increase in sales tax collections is: (a) $138.0 million higher than the Act 10 estimate ($119.3 million); and (b)$178.1 million higher than the amount certified by DOR in 2019 ($79.2 million).

This income tax cut will hit for this tax year, and only apply to the lowest 2 tax brackets in the state, so it makes the state's income tax structure more progressive, which means that the working class will get a similar level of tax cut that the middle class and upper classes might get.

And it's much larger than expected mostly because the COVID World encouraged more Wisconsinites to buy items online this year. From a budgetary standpoint, it's also interesting because the state's coffers benefitted from higher sales taxes that resulted from these online sales in the 2020 Fiscal Year (particularly March through June), but most of the bigger income tax cut isn't going to go out of the Department of Revenue until Wisconsinites file their taxes in early 2021. Which means that the good budget news of FY 2020 could translate into not-so-good budget numbers in the second half of FY 2021.

Like other aspects of our world in October 2020, the overall retail sales numbers may seem little different from where we were at the start of this year. But the COVID World has changed plenty in terms of where that money is being spent and those changes are going to continue to be felt for good and for bad in a whole lot of aspects of our lives.

WisGOPs do nothing, ignore reality as Wisconsin sets records for COVID deaths

File this under "timing is everything."

Today Ron Johnson told listeners on a WMC call that the coronavirus curve has been flattened, and that the virus isn't a death sentence https://t.co/IQrbBaH63j

— Laura Schulte (@SchulteLaura) October 21, 2020

And the chaser.

Nearly 50 deaths reported in a single day in Wisconsin. First COVID-19 patient admitted to state field hospital. https://t.co/WUrqzDUDsO

— Molly Beck (@MollyBeck) October 21, 2020

That news follows a record week for deaths in Wisconsin, and the rate of new cases also continues to rise, even with a lack of data on Saturday due to the Wisconsin Department of Health Services updating their systems.

The fact that Ron Johnson was trying to tell WMC oligarchs that the COVID pandemic curve had flattened made for an extra-high Bubble of RW BS. And it follows this story yesterday from one of WMC's bought-off WisGOP legislators.

Rep. Joe Sanfelippo, who heads the Wisconsin Assembly’s health panel, contends there is nothing more the government can do to fight COVID-19 https://t.co/HVJ8xAM0Wk

— Patrick Marley (@patrickdmarley) October 21, 2020

These WisGOPs have given up, and the more they ignore reality, the worse thigs get in both the US and in Wisconsin. Maybe we should have people in charge who believe in using the science to crush the virus over dying for the DOW, and getting the do-nothing GOPs out of the way is how that happens.

New report says Foxconn was even more of a fraudulent mess than you ever knew

Josh Dzieza of The Verge has been at the front of the line when it comes to exposing the failure of the Foxconn project in Wisconsin. And he has topped himself with this article that hit on Monday.

Foxconn never had a concrete plan for what to do in the state and has spent the last several years careening from idea to idea (exporting dairy, farming fish, literally anything that would make money). One idea that stalled early was actually making LCDs. https://t.co/EXH8WYU6Ke

— Josh Dzieza (@joshdzieza) October 19, 2020

Here's the link. Read it. Read ALL of it. There are some amazing stories and details that I've never seen before, and here's a taster.

Months after the 2018 groundbreaking, the company was racing to hire the 260 people needed to receive the first tranche of payments from the lucrative subsidy package passed by then-Gov. Scott Walker. Recruiters were told to hit the number but given little in the way of job descriptions. Soon, the office began to fill with people who had nothing to do. Many just sat in their cubicles watching Netflix and playing games on their phones. The reality of their situation became impossible to ignore. Multiple employees recall seeing people cry in the office. “The best is when you’re in the elevator with somebody and then they just scream out of nowhere,” said an employee who experienced this several times. “They’ve had enough, because things don’t make sense here.”

“Imagine being in a job where you don’t really know if it’s real or not. Or you know it’s not real, but you don’t know it’s not real. It’s a constant thing you’re doing in your head day after day,” said one employee, who returned to the rented building Trump had spoken at, where workers had been assembling TVs, only to find the line shut down and the lights dimmed a couple of weeks after the photo op was over. “I think all of us were on the verge of a major breakdown.”

It was just the beginning. Foxconn would spend the next two years jumping from idea to idea — fish farms, exporting ice cream, storing boats — in an increasingly surreal search for some way to generate money from a doomed project. Frequent leadership changes, a reluctance to spend money, and a domineering corporate culture would create an atmosphere employees described as toxic. Many of the employees The Verge spoke with have since left the company, and all of them requested anonymity out of fear of retaliation. It has been a baffling ordeal for the people who thought they were building the Silicon Valley of the Midwest — “Wisconn Valley,” Walker called it — all the more so because so many others still believe the vision.

Dzieza also illustrates the recent information released by the Wisconsin Economic Development Corporation (WEDC) which showed that Foxconn didn't come close to the level of jobs or investment that they promised in 2018 or 2019 - before any of us knew what COVID-19 was.

And let me remind you that in order to get those 291 (temporary) jobs, the state of Wisconsin sped up a $250 million project to expand I-94 near the Foxconn site, and diverted $137 million from the rest of the state's highways to widen and fix up local roads near Foxconn.

In addition, Foxconn also got water and electrical hookups taken care of for them, and Foxconn-area communities used eminent domain to clear out several homes, using tax dollars to reimburse those owners. And wait till state taxpayers have to bail out the Village of Mount Pleasant in a few years when they can't pay for the huge debts they took on to get Foxconn in their community.

And what did we get from all that money and turmoil? Fewer jobs than we'd get from a warehouse or a big-box score. On that subject, Dzieza goes on to describe how Foxconn tried to game their hiring numbers in order to get tax dollars off of Wisconsinites (unsuccessfully, as it turned out). As I've mentioned before, the Foxconn contract is written in such a way that the number of employees that "work" there are counted on December 31, but Foxconn doesn't have to say how many hours those employees worked during the year.

Sure enough, Dzieza says Foxconn tried to bring in a large number of temporary employees last year to show "job growth", in order to get our money.

According to the company’s subsidy application, it employed 580 people at the end of 2019. Sixty percent were hired in the final two months.

The layoffs began with the new year. Starting in January, when the promised LCD factory was originally scheduled to open, Foxconn instead began letting employees go in batches.

“It was a pump and dump,” said an employee. Many of the Wisconsin residents were laid off, as were many of the local college students. Some of Foxconn’s first hires had already left, including Tank Murdoch, who held a golden shovel alongside Trump at the groundbreaking ceremony, and Peter Buck, who often served as the public face of the project and employees say quit in frustration. (Neither returned requests for comment.) An employee involved with recruiting estimated in June that Foxconn’s ranks had fallen by approximately half from its end-of-year peak, with foreign employees making up a large share of those who remained. “Mandarin is spoken more than English on my floor now,” the employee said.

Buck and Murdoch aren't the only people gone from that day.

Only 1 person that's in this picture is in the same job 3 years later...and that last guy seems likely to be looking for work in 3 months as well (if not sooner).

Again, read Josh Dzieza's article in The Verge, because there's plenty of other stuff out there that'll leave you shaking your head. We knew Foxconn was a historical scam, and we kind of knew that this company and their GOP allies were BS'ing us. But I don't think any of us knew how pathetic and flat-out fraudulent this thing is, and every crook who voted for this piece of crap and lied to us for all this time deserves to get the boot in 2 weeks.

Weekend reading: "Wisconsin was never a safe blue state"

Wanted to direct you this recent article from FiveThirtyEight.com from Nathaniel Rakich, which helps to explain why Wisconsin went from being a "blue wall" state for Democrats in presidential years to being one of the biggest reasons that Donald Trump ended up in the White House after the 2016 elections.

Rakich begins the article by mentioning that Wisconsin was never that Dem-leaning to begin with, as evidenced by the razor-thin margins in 2000 and 2004. But Barack Obama overperformed in these parts, so it fooled people into thinking there had been a blue shift in the state.

Wisconsin is proof that politicos have short memories. In 2004, Democratic presidential candidate John Kerry carried Wisconsin by just 0.4 percentage points — making it the closest state in the country. Four years earlier, it had been even closer — Democrat Al Gore won the Badger State by just 5,708 votes, or 0.2 points.

But Democrat Barack Obama really connected with Wisconsin voters, winning the state by 14 points in 2008 and 7 points in 2012. Going into 2016, that contributed to a sense that Wisconsin was a safe bet for Hillary Clinton — part of the mythical “blue wall.” It had, after all, voted Democratic in seven consecutive presidential elections by that point.

Rakich goes onto note that the loss of Hillary Clinton and other Dems in Wisconsin was similar to losses Dems had in other parts of the country in places that had a lot of white people with low educations.

Conventional wisdom says that Clinton lost Wisconsin because she infamously did not visit the state at all during the final seven months of the 2016 campaign. But that’s probably not true; Clinton devoted a lot of effort to winning Pennsylvania and still lost there, for instance. Instead, Wisconsin probably got redder in 2016 for the same reason that Pennsylvania and other Midwestern states did: demographics. The one-time home of progressive stalwarts like Robert “Fighting Bob” La Follette and Victor Berger could not escape the modern reality that white people without a bachelor’s degree — who make up 59 percent of Wisconsin’s population age 25 and older — have become more and more Republican, especially in the Trump era. According to an analysis by the Center for American Progress, white voters without a college degree in Wisconsin went from supporting Mitt Romney 52 percent to 47 percent in 2012 to supporting Trump 56 percent to 38 percent in 2016. And as you can see in the map below, counties with the highest shares of white residents without a college degree veered the sharpest to the right:

Wisconsin's vote totals for president ended up being about 2.8% to the right of the nation (Clinton won nationwide by 2.1%, Trump won the state by less than 0.8%). And if Biden's 10-point lead (as shown by the 538 averages) holds, that would mean Biden would win here by a little more than 7, everything else being equal.

But how can Biden and othert candidates get to the point that Wisconsin is back in line with the rest of America? Rakich sees a couple of ways that involve different groups of Wisconsinites.

First, they could keep improving among suburban voters. As the map above shows, the Milwaukee suburbs were pretty much the only part of Wisconsin that actually moved toward Democrats in 2016. The problem is that, unlike, say, the Philadelphia suburbs, Milwaukee’s are still deeply Republican. The so-called “WOW counties” — Waukesha, Ozaukee and Washington — have historically been the center of Republican power in the state, powering such politicians as former Republican National Committee Chair Reince Priebus and former Gov. Scott Walker. And all the Trump era has done is turn them from maroon to crimson: Even as Republicans bombed in other suburban areas around the country, Trump still carried the WOW counties in 2016 by 28 percentage points, and Walker carried them by 35 points in Wisconsin’s 2018 gubernatorial race. It will be very interesting to see if Biden can continue to eat into that margin, though — if so, it could have long-term implications for Wisconsin politics.

Second, Democrats could fix their turnout problem among Black voters. According to the CAP analysis, 74 percent of eligible Black voters turned out to vote in Wisconsin in 2012, but only 55 percent did in 2016. Given that Black Wisconsinites voted for Clinton 92 percent to 4 percent, that was a huge blow to Democrats: According to CAP’s calculations, Clinton would have won Wisconsin if Black voters had turned out at 2012 levels but everything else had stayed the same.

But while Rakich points out that the WOW Counties were redder in 2018 than 2016, what's not mentioned is that Tony Evers did much better in those places than Mary Burke did, and it's a big reason why Scott Walker won't get the chance to screw up our elections in 2020.

Election results, 2018 vs 2014
Waukesha Co
2014 Walker +40.7%
2018 Walker +33.6% (-7.1%)

Ozaukee Co
2014 Walker +40.6%
2018 Walker +26.7% (-13.9%)

Washington Co
2014 Walker +52.5%
2018 Walker +45.7% (-6.8%)

On the turnout side, Dems got to the polls in 2018, which led to the end of Scott Walker's reign as Governor despite Walker getting more votes that year than in his prior 3 elections. On the flip side, both Mitt Romney in 2012 and George W Bush in 2004 got more votes from Wisconsinites than Trump did in 2016.

Now put those two trends from 2018 together (WOW Counties not being as red, and more Dems turning out), and that means big trouble for GOP hopes in the state. Can Trump do even better in the low-educated red counties than he did in 2020 as an incumbent with a record (which takes out some of the "shake things up" voters of 2016)? And if Biden gets 1.6 million votes like Obama did in 2008 and 2012, would Trump's performance in rural Wisconsin even matter, because he'd lose by 100,000-200,000 votes anyway?

Seems worth keeping an eye on going forward, especially as hundreds of thousands of Wisconsinites have already voted, with the most votes coming from areas that Trump did worse than Romney in.

Latest returned absentee ballot numbers from @WI_Elections (10/16):
Brown Co. =42,246
Dane Co. =135,098
Kenosha Co. = 20,442
Milwaukee Co. = 132,701
Outagamie Co. = 27,615
Racine Co. = 22,372
Rock Co. = 21,567
Waukesha Co. = 67,542
Winnebago Co. = 24,871
State total = 821,300

— Victor Jacobo (@victorjacobo_) October 16, 2020

Where WisGOP arrogance flows, COVID tends to follow

Due to Janesville being host to the latest Trump Superspreader Rally in Wisconsin, I wanted to go back to what happened to the last place that hosted a Trump rally in Wisconsin - Marathon County.

That event at the Mosinee airport was on September 15. So how's Marathon County's COVID scene since then?

And that "decline" in the last week? That's the total over 4 days, as the Wisconsin Dept of Health Services is undergoing website maintenance over this weekend and isn't updating numbers until maybe today.

So how has Rock County been doing in recent weeks, before it was "honored" with the attendance of a few thousand Trumpers last night?

Oh, that's not good either.

Also wanted to check in on another part of the state that has actively avoided dealing with COVID-19 - the largest GOP-voting county in the state, whose top elected leader said that there was no need to take any formal action against this pandemic.

Waukesha County Executive Paul Farrow made the following statement after Governor Tony Evers issued a statewide mandatory mask mandate on July 30, 2020.

“Waukesha County has an active and aggressive response to the COVID-19 pandemic, and the community’s health and safety are my top priorities. However, the Governor’s Emergency Order to mandate mask-wearing goes too far. While Waukesha County supports and actively promotes masks and face coverings as a tool to stop the spread of the virus, a government mandate will create many more issues that will not only make it more difficult to respond to the pandemic, the unenforceability of the order undermines existing laws, and overreach from the state erodes public trust in the government.

“Today, our 911 dispatch center, Sheriff’s Department and other Waukesha County departments and divisions are already receiving calls from residents concerned about this order, and we expect that to intensify when it goes into effect on Saturday and individuals begin to report others to law enforcement.

“I want to urge all members of the community NOT to call 911 to report individuals who do not properly follow the mask mandate. We need to preserve emergency response resources that are already taxed as we work to manage this pandemic, we need to ensure that local law enforcement is not reallocated from other areas to enforce this order, and we need to recognize that there are individuals who, for a number of reasons including health conditions, may not be able to safely wear a mask.

“The unfortunate fact is that the biggest impact will be on our local business owners and their employees who may be put in the uncomfortable position of enforcing the Governor’s order. Private businesses should have the flexibility to implement their own rules on mask usage in their establishments, it should not be their role to enforce government orders.

So how's Waukesha County been doing as COVID hammers the state?

Again, that record number for last week? It's only 4 days, not 7.

And if you wanted more proof that Karma is real.

Waukesha County Executive Paul Farrow has tested positive for COVID-19https://t.co/opEIVkWC8j

— Urban Milwaukee (@UrbanMilwaukee) October 17, 2020

Sorry GOPs, you are not special, and you cannot pretend this virus doesn't exist. And because you refuse to admit this reality, maybe you shouldn't be in charge of anything for a while.

Either Wisconsin is nearly back to normal, or we're down 200,000+ jobs. It can't be both

The final Wisconsin jobs report before the election was an odd one, where the two surveys told very different stories.

The Department of Workforce Development (DWD) today released the U.S. Bureau of Labor Statistics (BLS) preliminary employment estimates for the month of September 2020. The data shows that Wisconsin added 23,800 total non-farm and 13,700 private-sector jobs in the month of September. Wisconsin's unemployment rate for September was 5.4 percent, down from August's revised rate of 6.3 percent.

The job numbers are nice to see, but are well below what we'd be seeing if unemployment dropped by 0.9% for the month - and to a figure that is less than 2% above where we were in February, before COVID World began.

In fact, the household survey (which the unemployment rate is based on) indicates that more than 105,000 Wisconsinites got back to work in September, and more than 82,000 got back into the work force. Which is a major change from where the household survey had us in August.

The household survey does have a lot of variance from month-to-month due to its small sample size, and I'm not going to buy that we've had a massive jobs boom in the state for August and September (look around, does it look like things have turned around like that since July?).

Especially since the trends in the Wisconsin payrolls survey largely match the shocking 2-month decline and plateauing recovery that the national numbers are showing.

The payrolls survey says Wisconsin is still down more than 212,000 jobs, vs the household survey that claims only 33,000 fewer people are working vs pre-COVID World. I suppose we find out in the coming months which is more accurate, as more data from this chaotic time comes in and the annual benchmarking process takes place. But which side of the jobs report you're inclined to buy into might explain a lot when we look at election results in less than 3 weeks.