Vulture capitalism strikes again, exploiting undiversified, banana republic rustbelt towns who misplace their faith in a single, quick-fix, recovery panacea rather than many different industries that are geared to the needs of today.
I imagine a lot of readers are taking umbrage at these towns being called “banana republics.” Honestly a lot of American town and city councils can be described this way, regardless of where in the US they are. I write this as an American who has been to too many local government meetings over my life.
Yes. There are way to many local government representatives who think they can go "toe to toe" with the lawyers and officers of multinational corporations. They often take promises from those corporations at a word and don't (or can't) hold the corporations accountable when promises aren't kept. Inevitably the local representatives, and the constituents they represent, are left holding the short end of the stick.
I'll also point out the whole deal was bought & sold by the state government as well. It wasn't just the local government. Governor Walker and the state representatives had an interest in getting the Foxconn deal through to show they were "creating jobs" for the state.
I don’t think you know what the term banana republic means. A rust belt town with an American middle class (even in an economic depression) doesn’t qualify. They are in no way dependent on a single corporation.
I disagree. SOME rust belt towns are not dependent on a single corporation. Other rust belt towns are and when that company ceases operations there, the town experiences rapid decline.
If you disagree that some rust belt towns are dependent on a single corporation, I think you are either using a different definition of dependent than how I read the original comment use it, or you are not aware that towns where a single factory employs a significant portion of the towns population exist.
In banana republics, the citizens have no mobility compared to US citizens so the dynamic is completely different.
The fact that people in these towns can continue to live in them and easily telecommute like any other US citizen or even physically commute to the nearest major US city means that the citizens are not dependent on a single industry.
Reply all is an excellent show, and Gimlet media has an excellent lineup of podcasts in general. I particularly like the early seasons of startup (I may have to check back in this season for them covering they sale to Spotify), and Every Little Thing.
It's well produced podcasts done well. If you took This American Life and scaled it to few slightly more targeted podcasts but kept the same quality, that's what they offer. That's less a metaphor than a description of history, given the original founder cut his teeth on TAL and then started Planet Money (also still excellent) before starting his own company.
Okay, that's enough fanboying from me. It's just that I listen to a lot of podcasts, and Gimlet accounts for a large amount of my favorites.
To be fair, as far as people in Wisconsin are concerned, the deal can't really get any worse, per sé. It was already pretty clear that we'd been hosed a long time ago. Then, mercifully, the trade war came along and may kill it completely if the Gods favor us!
It's not often that you play poker with the Devil, and due to a technicality in his contract for your soul, you're allowed to fold and walk away. If you ever get that lucky, you just cut your losses, walk away, and count your blessings.
Follow along with this story, its a crazy rabbit hole into a late-capitalism where actual production of goods is completely abandoned, and instead the state directly funds 100% pure profit with no social or productive benefits. Literal pure theft.
It's important to note that to a large extent, this is the reality of bringing consumer goods manufacturing back to the US. The only way it will ever make financial sense for companies to do so is if it either comes with a massive subsidy or if the number of human jobs is small. Any deal promising thousands of blue collar jobs doing what is far cheaper to do elsewhere should probably be regarded as bullshit until proven otherwise.
Note: this does not necessarily apply beyond "cheap" consumer goods. For example, cars and trucks are still produced at many US plants for a variety of reasons.
In the long term a supply chain that is predominantly local will consume fewer resources and be more resilient to disruption. This isn’t always possible but the incentives you’re referring to are only because us corporations optimize short term profits over sustainable businesses.
As long as a business' primary responsibility is to shareholders rather than, say, the local community, the consumer or the environment then that won't change. Investors are a big part of it, yes, as they demand quick returns today rather than steady returns years from now.. but the fundamental problem is that investors' demands set the pace because of the structure of the structure of the entire economy
It’s also a hell of a lot more complicated than that. Investing is only one income source, and companies like Amazon and Walmart are counter examples to my own reduction. I think there are cultural elements at play here on why more companies don’t take a longer views and investors/certain business schools are an obvious place to look.
> In the long term a supply chain that is predominantly local will consume fewer resources...
This is false, and understanding that is key to understanding why globalization brings greater efficiency.
A local supply chain may only cater to local customers, leading to substantial loss of efficiency due to lack of scale.
A local supply chain might use inputs which cannot be transported (labor, electricity), and those might entail more resource cost (Americans are much more resource intensive per person than Indians, coal power stations use more resources than geothermal).
Where externalities are correctly priced, and without tariffs or subsidies, buying from wherever is cheapest will always work out most resource efficient.
This depends on the process of manufacturing and the stability of the trade network. What industry does not benefit from redundancy and locality? Efficiency is only one thing to optimize.
> Where externalities are correctly priced, and without tariffs or subsidies
Where is this market!?!? We live in the real world with events, people, and utterly irrational decision makers.
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[ 3.0 ms ] story [ 71.7 ms ] threadIf you disagree that some rust belt towns are dependent on a single corporation, I think you are either using a different definition of dependent than how I read the original comment use it, or you are not aware that towns where a single factory employs a significant portion of the towns population exist.
The fact that people in these towns can continue to live in them and easily telecommute like any other US citizen or even physically commute to the nearest major US city means that the citizens are not dependent on a single industry.
It's well produced podcasts done well. If you took This American Life and scaled it to few slightly more targeted podcasts but kept the same quality, that's what they offer. That's less a metaphor than a description of history, given the original founder cut his teeth on TAL and then started Planet Money (also still excellent) before starting his own company.
Okay, that's enough fanboying from me. It's just that I listen to a lot of podcasts, and Gimlet accounts for a large amount of my favorites.
It's not often that you play poker with the Devil, and due to a technicality in his contract for your soul, you're allowed to fold and walk away. If you ever get that lucky, you just cut your losses, walk away, and count your blessings.
Why would the trade war with China kill off this deal with a Korean company?
* Foxconn scraps plan to build factory in Wisconsin, will hire white-collar workers instead https://www.washingtonpost.com/business/2019/01/30/foxconns-... * Foxconn and the village: the $10B factory deal that turned one small Wisconsin town upside down https://www.theverge.com/2018/12/6/18128133/foxconn-deal-wis... * What Foxconn’s really doing in Wisconsin, with Reply All’s Sruthi Pinnamaneni https://www.theverge.com/2018/12/11/18136020/foxconn-wiscons...
Note: this does not necessarily apply beyond "cheap" consumer goods. For example, cars and trucks are still produced at many US plants for a variety of reasons.
Speak for yourself. I think the investor culture is where this comes from, more than from the people operating the businesses.
This is false, and understanding that is key to understanding why globalization brings greater efficiency.
A local supply chain may only cater to local customers, leading to substantial loss of efficiency due to lack of scale.
A local supply chain might use inputs which cannot be transported (labor, electricity), and those might entail more resource cost (Americans are much more resource intensive per person than Indians, coal power stations use more resources than geothermal).
Where externalities are correctly priced, and without tariffs or subsidies, buying from wherever is cheapest will always work out most resource efficient.
> Where externalities are correctly priced, and without tariffs or subsidies
Where is this market!?!? We live in the real world with events, people, and utterly irrational decision makers.