Can someone explain to me why Foxconn didn't build the plant? Why would they go through the trouble of negotiating this deal, which ended up phenomenally in their favor, just to throw their hands in the air and walk away?
It’s funny that they are downvoting you for stating the obvious no-brainer explanation.
Just curious as I am seeing more of this on HN lately or is it just the Baader Meinhof phenomenon after I read someone else complain about the recent downvoting phenomenon for stating the obvious. Has the readership changed of HN or more specifically the commentariat?
It wasn't really my take or opinion, I rather recalled it being cited as the reason by Foxconn itself in multiple instances. Also, I'm from Wisconsin, and an old EECS professor explained this to be the reason from his first-hand knowledge of some conversations with Foxconn. Here is one citation I was able to find quickly:
He said the company was still evaluating options for Wisconsin, but cited the steep cost of making advanced TV screens in the United States, where labor expenses are comparatively high.
“In terms of TV, we have no place in the U.S.,” he said in an interview. “We can’t compete.”
Foxconn has factories in Mexico, Chennai, Malaysia etc. which produce a significant amount of devices but I doubt a factory in US will take off. This article from 2012 about the Steve Jobs "These jobs are not coming back" remark is probably still true: https://www.nytimes.com/2012/01/22/business/apple-america-an...
> I rather recalled it being cited as the reason by Foxconn itself in multiple instances.
It's more plausible that any company will give the more acceptable, easily digestible explanation, rather than the real one.
But really it's the politicians who won, first by banging their chests for all the investments and jobs they created, now for getting an easy out. They can't be blamed for not seeing through any ploy because they can argue Foxconn obviously had good intentions sabotaged by "a misunderstanding" that couldn't have been caught.
It's very unlikely (by that I mean close to impossible) that Foxconn just "blundered", went through many rounds of negotiations, and started building, while genuinely not being aware that the US labor market is different from the Chinese one.
You're being downvoted likely because of how naive it sounds when you take what Foxconn says at face value.
Large companies are unlikely to ever tell the truth about their motivations, but they're even less likely to when they were doing something manipulative and dishonest, as Foxconn was here.
Your mistake here is taking a multinational corporation at its word, especially one known for playing games with subsidies in other countries too. These quotes are the cover story from corporate PR, not the truth.
The alternative is that Foxconn is lying, and they never had any intention of actually opening the factory, which I think is a far more likely explanation.
The new approach is contract manufacturing for customers who are uncomfortable with manufacturing being performed in China, speaking from first-hand experience. This demand does exist and is what is going to be leveraged in the new park.
> Has the readership changed of HN or more specifically the commentariat?
My personal impression is, that it got a lot worse since Covid, which I attribute to more people doing home office and/or having more free time. Any discussion forum that grows gets worse.
But both my impressions and the 2nd part might be wrong.
I think you nailed it with Covid. Critical thinking requires discourse, and discourse on all the possibilities beyond the dominant narratives or paradigms. Downvoting does not make reality or the “ugly” truth go away. We should be here to discuss and not be afraid to ruffle feathers and have easily offended sensibilities.
Since You qualified your own statement as being possibly being wrong, I would argue that more engagement alone doesn't result in more down votes.
I have observed that any comments criticizing anyone, regardless of wether they are justified or not seem to be recieved poorly on modern forums.
I believe this is due to an ongoing effort to make forums safe spaces, somehow honest critical thinking is no longer accepted in the current environment. Right or wrong, it is what it is.
So if You are really concerned with the fake points You are accumulating then just tow the line, get with the woke SJW movement or submit articles of interest to balance out the backlash from the mob....I probably better start looking for a good article :P
Yup, it is what it is. Good news is the points mean nothing and there are plenty of critical thinkers still on this forum. BTW is it tow or toe the line? Homonyms always catch me up!
It does apply to specific discussion venues. Originally it was about Usenet groups, not the Internet as a whole. It applies broadly to any forum-like venue.
While it’s similar to Eternal September, it’s not exactly the same. It’s more that the more users there are, the more average things become. And I have a pretty low opinion of the average person.
It’s very visible on Reddit. Large subreddits have either very strict moderation, or they are low quality (I’m excepting picture subs here because they work differently)
I genuinely don't understand how 'international mega-corporation doesn't understand international labor differences' is a no-brainer. Please explain that to me. That seems like one of the first things that any company should evaluate.
Honestly? I assume the people who negotiated the deal are a different department from the people who would have implemented the deal. They went big and went home and now it's someone else's problem.
Is it really a no-brainer that a giant transnational company signed a multi-billion dollar deal without anyone investing half a day looking into the situation of the labor market of the target region?
You say stating the obvious and yet it simply isn't. It was a heavily subsidised political stunt that Foxconn could half-ass. They rolled out the red carpet, exempted them from environmental regulations and basically built the infrastructure for them. Even four years ago they said the number of jobs was a wish not a promise, they were BS artists.
The downvotes might be coming from people who are actually familiar with the situation and know that the "obvious no-brainer explanation" isn't the correct one.
This is a take that's wildly generous to FoxConn, painting them as the "aww schucks" kinda honest guys that just didn't know about the challenges of the US labor market.
The alternate take is that the whole deal was made in bad faith and FoxConn was hoping to collect subsidies and line its pockets. This version of events has some precedent[1]. It's especially hard to believe that FoxConn didn't know about US labor when this same situation played out in Pennsylvania in 2013[2].
You're 100% spot on. I cannot be convinced a multi-national mega-corp is ignorant of US labor and the challenges in the US labor market. There just is no way that's possible for a company this size, or am I wrong?
So that leaves either bad faith, or they are just abjectly incompetent. I can't really see any other options. Or, again, am I way off base?
> I cannot be convinced a multi-national mega-corp is ignorant of US labor and the challenges in the US labor market.
Especially one that is a specialist in harvesting laborers from all corners of the world. I can only imagine selecting the right labor force has to be their main competences.
I mean, it was bullshit from jump street, but if Wisconsin had poured (more) money into Foxconn's pockets, I'm sure they'd have been happy to put something up.
This is the key people often overlook. If we stop using our AI geniuses to develop tracking algorithms and start building automation, we can have nextgen factories in the West.
The environmental factor is yet to be solved though.
For the most part, developing countries are trading environmental damage for money. Not much different from harvesting oil or other resources to an economist.
Well let’s see, work in adtech and make $1M TC and get treated with kid gloves by the company or work in industrial engineering and make $100K and be a cost center.
How do we change the incentives? Ban advertising and tracking? But making the alternative more attractive is out of the cards...
I know and I agree. It's hard. But don't tempt me on banning ads! :P
If you look from the outside, as a society we are using a lot of our best brains for very frivolous things. I wish for a more efficient way of using our minds!
Physical manufacturing doesn't have the sort of profit margins that software provides. You can't give devs the kind of pay many expect when there are 10x more people in the production chain. Investors aren't going to flock to such businesses.
Inverstors are very short sighted. I am advocating for a 100 years plan. You can't expect a bunch of greedy boys to plan for returns after they are dead....
I'm not saying it's economical, but anyone willing to pay 2.5x the cost of a Made-in-China phone could have their phone assembled in the United States: https://puri.sm/posts/librem-5-usa/
(No relation to the company, though I did once have a very nice chat with Todd Weaver).
And to the larger point: I agree completely that politicians opening their mouths about jobs (and also about anything else, IMO) is bad faith bullshit.
It's not unprecedented that someone who should know better, and has the best advisors in town, is blinded by their preconceptions about a country and its people. It's lost us a few wars.
Politics. Political capital. There are international advantages to having the US president endorse you, your project and your company. Those photos were probably worth the hassle.
Not just the photos but the initial publicity. People remember the beginnings of things if they're broadcasted through mass media. I recall many people claiming this a 'big win' at the time and attributing to the sitting president. I recall also being highly skeptical and suspecting a political stunt but completely forgot about the status until reading this.
Meanwhile, people at large don't follow progress of these endeavors. Some journalists may but there's selection bias from the journalist and the news consumer as to what they ultimately see and stay informed of. These stunts are forgotten by most (myself included) in the daily scramble of things we have to keep track of and manage. Did it fail? Did it succeed? Do I even remember it or just the emotion it attributed to something else I actually do remember?
Ambiguity hiding in complexity of daily life lets people say and do a lot of things and get away with it. It's often far too difficult and time consuming to unravel the ambiguity and complexity to show if something succeded, failed, or to even have cognitive capacity to keep track of. The end result, as you point out, is political capital people walk away with. The emotional impression at the time is what was sold and stuck to most people. "MAGA", "bringing back manufacturering", links to nostalgic economic golden eras for many workers.
Scott Walker, the governor, who signed the deal lost his office a year after it was signed in part due to backlash over the deal.
Think about it from Foxconn's perspective, if you got a sweetheart deal and the person who gave it to you got canned for it, are you going to follow thru and put in billions of your dollars on the assumption that you'll still get billions of government subsidies in return?
I wonder if it might have been water. They may have needed more than a sweetheart deal with the state. I think a big reason for the location was the water supply via Lake Michigan. They got a waiver of state environmental laws as part of the deal, but they still had to contend with federal laws, and a treaty with Canada that governs water use in the Great Lakes watershed.
There was quite a controversy over the environmental impact of this plant. The "word on the street" is that LCD manufacturing is a dirty industry requiring a lot of water.
I think it shows the idea that "Americans can't do business well", and historically, doing business well has been one thing that Americans pride themselves on.
edit I should add that I believe that spreading that kind of message has geopolitical implications, and that groups might want to create that image for strategic reasons.
From what I can tell, Foxconn never actually intended to build the plant. (I'm getting a lot of this from an interesting long-form article on the history of this deal; unfortunately, I don't remember where I found this article, sorry).
Essentially, Foxconn thought that the Wisconsin deal would work more typically as its deals in China went. Glad-hand the government officials, get sweetheart deals on land and investment, and as long as you're not totally incompetent in making use of it, they won't care what you do with it, even if you fail to live up to the original promises. It's not clear to me that Foxconn actually seriously considered producing LCD screens here given this light; the announcement would have been more to make Walker and other government officials ecstatic about the deal than an actual commitment to follow through. The fact that outrage towards the deal would lead to Walker losing reelection and his successor keeping a much closer eye on performance (or lack thereof) seems to me to have caught Foxconn completely off-guard.
I think there's another level going here in relation to internal Foxconn politics, but my recollection is too hazy to make a coherent explanation, and I don't want to make any false accusations here, so I won't go into any more detail.
Nope. The plant that was promised was never built. They did build some storage warehouses and started a propaganda program where they hired dozens to hundreds of locals to come in to the warehouses, sit around, and do nothing to appear like they were doing something.
Many people don't have a clue what "30-fold" even means, and therefore it sounds big and scary. Basically, it's just one of the tools in the sensationalist headlines toolbox.
…is that true? I understand “30-fold” to mean “30x” and I’m pretty sure I have from a very young age. I haven’t checked but I’d be surprised if my peers weren’t the same.
I think people understand 30-fold to mean 30x, but don't always intuit that "slashed by 30-fold" is equivalent to a reduction by 97% of the original deal. They especially don't understand that the difference between a 20-fold, 30-fold, and 50-fold reduction is the same as a 95%, 97%, and 98% discount.
This is especially evident in the mental gymnastics required to understand retail sales pricing. How good is a "Buy two, get one 50% off!!" deal? Brains easily give up on the hard questions and substitute easy answers. "What's it actually worth? Bought one at another store last month, do difficult pricing history memory, or easy answer, the original price is listed right there. How good is the deal? Complicated math, or easy answer, it's at least a good enough deal to merit a big sign, bright colors, and two exclamation points. And it's good for a limited time only? Better not miss out, buy now!"
Here, the scope of the reduction is kind of irrelevant. They basically scrapped the old deal and tried to write a new, smaller one. Had they scrapped the megafactory plans and decided to open a fast food franchise it could have been reduced a million fold!
The new agreement offers $80M and asks Foxconn to spend only $672M on a factory that will employ only 1,454 people by 2025. The original deal offered Foxconn $2.85B (or $2850M) to spend $10B ($10000M) and hire 13,000 by 2032. Big numbers are hard, but running the math it's now $55k/job and $0.13/dollar of capital investment, it was $220k/job and $0.285/dollar. $80M is 2.8% or a 30-fold reduction from $2.85B, but the full story is they've simultaneously reduced the ratios of the incentives and the scope of the required investment.
A complete understanding of what those numbers mean is really hard to develop, and isn't really distilled by a substitution in the headline of 30-fold to 30x. Human brains in general are busy and don't like to work too hard, and whether we use "30 fold" like "four score" in our daily vernacular or they say 97% and 80, the headline's effect is the same. It conveys to readers who don't want to run all the numbers about average salaries and payroll taxes and capital depreciation and so on that the previous administration tried to offer an excessively generous deal but the current government has rolled that back to something a lot smaller, don't worry about exactly how much but just trust that it's a lot.
I believe everyone (with a basic education) should be able to understand both, but I think the X-fold representation is much clearer-- just compare how similar decreases by 80%, 90%, 95% appear at first glance-- but there is a full order of magnitude between EACH of those (while 50% and 55% is basically the same thing)!
Calling it a 5-fold, 10-fold or 20-fold decrease makes the difference between them much more immediately obvious, IMO.
Its similar with the miles/gallon vs. liters/100km metrics for fuel consumption, where one of them just seems immediately more intuitive to grasp and use (to me).
I find x-fold to be totally clear and intuitive for increases, but I find it weird for decreases. "We've decreased it by 5 times" sounds to me like "We've decreased it by 500%", which it obviously doesn't mean. "We've decreased it to 1/5th", "we've decreased it by 80%" makes more intuitive sense to me.
Maybe it is similar to miles/gallon vs liters/100km and depends on where you grew up. I feel like the usage frequency changed, but it could just be that I'm noticing it more.
It's because percentages are more misleading for humans than "x-times". 95% and 97% sound very close, right? They're not. 95% is a 20x reduction, while 97% is a 30x reduction. Percentages create a singularity at 100, which is why the effect is more pronounced the closer you get to 100.
It's just like how saying something is "95% effective" sounds very convincing until you realize that's a 1-in-20 failure rate.
The massive downward revision of this deal, and of Foxconn's commitment to create jobs in Wisconsin, is hardly a surprise. Foxconn has a history of reneging on promises to build factories, as was widely reported when this deal was first made in 2017:
Exactly. People like Trump have careers that resemble repeatedly pumped-and-dumped penny stocks. They rise and fall, rise and fall, rise and fall.
Basically what they do is build themselves up through something like a social capital pyramid scheme. This eventually collapses when there are no greater fools and when all their promises fail, but the good ones already have the next grift in progress before the first one collapses.
Trump is truly one of the greats at this. Not only does he do this very well but he builds the next grift off the previous one. He's IMHO the world's premier expert in "failing up."
Brilliant comment, I think we are going to see this in the future too with Trump. He has gone quiet for now, but he's going to come back and make far more money than he was making prior to the presidency.
I'm not going to hold my breath waiting for him to be imprisoned. But I do think he's going to be spending a lot of time in courtrooms for the rest of his life and that's at least some consolation.
Not sure why you're downvoted because this is what Trump has done through most of his life. While POTUS, his healthcare plan was 2 weeks away, his infrastructure plan was 2 weeks away, the wall - I guess a few feet were built.
I have a speculation that some fraction of the tech-libertarian crowd likes him precisely because he was a dumpster fire. He helps discredit the state. Keep electing candidates of that quality and seasteading schemes start looking attractive.
Trump's appeal is precisely that he's the worst candidate apart from all the others, and the opposition keeps proving his point. Plenty of people would have preferred a non-dumpster-fire conservative, but didn't get to pick. Meanwhile, Biden was nominated purely to be an easy mouthpiece for the DNC, (certainly not on his record for race and crime issues,) but had every corporate and media voice possible behind him.
This is such a lame excuse. In 2016 there were 16 other candidates in the primary, and 4 in 2020. Literally every single one of them would have been a better choice. If all else fails, you don't vote. Don't pretend like there weren't options.
Self-righteously holding your nose and voting for a dumpster fire is still voting for a dumpster fire.
I'm not so sure they all would have been better. Republican voters are wary of candidates who get into an establishment position and then abandon conservative policy--for all of Trump's personal ills, most of his voters were pretty happy with him from a policy standpoint. If you know that your party's nominee is going to be vilified by the media regardless, it does make some sense to pick one who's not going to waste time trying in vain to be likeable.
Trump is a true grifter prodigy, who has managed to “fail” hundreds of times – while skimming billions of dollars away from investors, business partners, lenders, suppliers, employees, and customers – often in full public view, and both skate away from criminal liability and still keep finding more marks, ultimately including something like 40% of the general public.
That may be true, but the last piece is genuinely different. If he was a fraud as a candidate, then he was a fraud in a situation where there was no legitimate substitute. Few voters have changed their minds; the aftermath of 2020 has been a digging-in of heels in a culture-war, not a "We've been had!" moment.
Trumps brand is still strong it seems (or at least Republicans think so) and it added to his brand - I do think the most important thing to Trump is branding, being president is secondary. Or the other way around: Being president added to the brand, that's what Trump was interested in* He doesn't care he lost the presidency in principle, but because losing tarnishes the brand. He would be the same losing the presidency of a golf club.
You won't license a brand that already scrunes >50% of potential customers in the US is and way more in the western world ( but the contacts seem to be solid, so it's very expensive)
Look at all the hotels trying to get off the Trump brand. And all the businesses that associated themselves with Trump during his presidency.
"Trumps brand is still strong it seems (or at least Republicans think so)"
Jeez. In all of my marketing efforts I would never immediately out of the gate alienate 60-65% of my potential customer base. And the Trump brand did nearly that from day 1.
Sure, but he's got an extremely loyal 40%. Of course, most of that demographic aren't the folks that can afford a night in a Trump hotel or to buy a membership at one of his golf clubs.
You probably need to consider the wider impact, not just Wisconsin. This was national news (I'm international and I remember reading about it) and would have contributed to his supporters general perception that he was delivering on promises. This isn't really an area where we can single Trump out as he was just being a normal politician here. It's common to announce an amazing deal with a big fanfare which then either fails to materialise, is in fact not as amazing as the headlines claim it to be, or includes previously agreed policies or agreements that are claimed once again as new. This is just typical PR (unfortunately).
It's either a lot less common than you're making it out to be or it should not have made international news. Anyone who followed this story from the beginning realized it was not a good deal for Wisconsinites.
The political aspect is central to the Wisconsin/Foxconn story, but by naming "Trump", or "Republicans", or a certain Wisconsin governor explicitly it guarantees that the discussion descends into a partisan flamewar.
Consider instead something along the lines of "it achieved the desired political benefit for certain politicians". By keeping it abstract, even if it can be deduced who you're referring to, the discussion can remain less adversarial.
was probably impactful on Wisconsonian's move away from Trump in both the midterms and in 2020. I don't know of any polling that connects the two but the foxconn disaster was a frequent topic of conversation here.
I grew up in Racine County (which contains Mount Pleasant). Let me tell you, SE WI is a strange place. Caught between so many sensibilities and hit so, so hard by economic shifts of the last two decades. I think it suffers, like many places in the American Midwest, the phenomenon of an historically working-class population, who, a few decades ago, would have organized for labor and other rights very vocally and outwardly, but who now are radicalized to the right for no understandable reason.
I still like to believe that most of the people around there are good and mean well, but it gets harder and harder every day to believe the willful ignorance they possess of economic, societal, and cultural issues at hand, here and now, will fade. But there's hope. Younger leaders are working their way into local government (hi Greta!), especially over in the formal City of Racine. There's hope that Racine and Racine County might be a leader of progressive values in the area.
As an aside, I think there's oodles of opportunity in the SE WI area for younger folks. It really is a beautiful place, is near to Chicago and Milwaukee, and is inexpensive. You get all four seasons, for better or worse. I think it's better than SF's summer and grey-chillier-summer. Some joke that the four seasons are winter, construction, construction, and construction, but that's an exaggeration. Anyway, I think an influx of more diverse people in background and ideology could really stimulate an area like SE WI. Add to that making it worth young people staying around instead of fleeing to the coasts, and suddenly Racine can be a really cool place.
This whole Foxconn thing just makes me so sad, and angry.
You claim to not understand how that group of people can swing right and then proceed to attribute ignorance to that group of people. This doesn't compute. Very partisan and ignorant of you.
Hi friend, thanks for your response. I appreciate the criticism and the opportunity to re-evaluate my point. That said, after thinking about it, I don't believe there's a contradiction in what I've written. Point in fact is that I do not understand--in a personal sense of it "computing" (as you put it) to me--the forces at work that push people to be, as I said, wilfully ignorant of real issues facing the area and planet at large. It's not that I don't understand the people at all and simultaneously attribute ignorance to them, it's that how the ignorance comes to be is a mystery to me. An observer can see an effect without knowing the cause. That's usually how we begin to learn anything. There's a comment adjacent to yours that puts words to a gut feeling about it that takes a big step toward understanding, I think. Discourse is great!
Why is it partisan? Let’s pretend OP said “swing left”. Being against the left isn’t how partisan is normally defined. It’s usually the bias of being for a specific cause/political party. What would be the cause here? Not being pro American politics left? That does not give much info about what causes the person is biased for.
Americans classically derive much of their sense of value from:
1. Work
2. Race (for many white people, especially historically)
...and that's about it. Unlike other cultures our "rugged individualism" means that we don't tend to derive as much sense of worth from family, traditions, organizations we belong to, etc. This is especially true for men who are raised to believe that who they are is what they do.
The economic shift to a service- and knowledge-based economy with many manufacturing and ag jobs being automated or outsourced away has devastated 1. in many communities. The march towards better civil rights and equality is chipping away at 2.
This has left a huge number of Americans feeling that they are worth less than they used to be. People like that are ripe for being exploited. People will buy anything if you tell them you're selling dignity. Trump's "Make America Great Again" slogan was really "Make You Feel Like You're Great Again".
> Unlike other cultures our "rugged individualism" means that we don't tend to derive as much sense of worth from family, traditions, organizations we belong to, etc
I agree with the overall premise, but there is a single notable exception to to this, which is the military, which is the intersection of family, traditions, and government organizations. But even there, as we have seen recently, there is a white nationalism problem afoot.
>Americans classically derive much of their sense of value from:
> 1. Work
> 2. Race (for many white people, especially historically)
> ...
> People will buy anything if you tell them you're selling dignity.
All true, and it's important that politicians who hope to actually heal these folks focus their efforts on restoring the dignity that comes from work and community, and dispel the dangerous sort of "dignity" peddled by ethnic/racial nationalists.
> a single notable exception to to this, which is the military
This is a bit of cognitive dissonance I find fascinating among the far right. I have had conversations with many people who clearly simultaneously believe:
1. The government can't do anything right.
2. We have the world's best military.
And yet for most it hasn't seemed to click that the military is a government program.
But, again, I think this gets to my larger point that because the military is such a source of prestige for many Americans (especially poorer ones with few other upward mobility options), they are able to maintain that bit of cognitive dissonance.
(And, to be clear, I absolutely do not think conservatives have a monopoly on cognitive dissonance. I see many different ones all along the political spectrum.)
Hard to process this kind of cynicism, accurate though it is. Not your demeanor, by the way, friend, just the reality of it all. Ironic that I speak of willful ignorance and yet am happy to not think too hard about the very things you've called out here.
I really don't mean this to sound cynical, though I can see how it comes across. I think it's more about understanding human psychology and trying to use that understanding to empathize with and understand why people behave in seemingly irrational ways.
As a tribal primate species are absolutely hard-wired to seek ways to provide value to our tribe. Being worthless to the tribe means being left in the forest, which was a death sentence to our evolutionary ancestors. So our need for social prestige is as fundamental as food and shelter. Perhaps even more so since for most of our ancestors, food and shelter came from the tribe.
The ways we seek out that esteem are determined by our surrounding culture. If esteem is the game we're trying to win, culture determines the board and the moves we're allowed to make. We can push against culture somewhat and it evolves over time, but we're largely stuck with the one we're enmeshed in.
So you get a set of people who need to feel valued. You raise them in a culture that says the main way to do that is by having a well-paying job. Then you take away the jobs. This is a recipe for unrest and strife.
Oh definitely -- I'm not detecting cynicism in you and maybe it's the wrong choice of word. I'm more feeling a sense of disappointment in what you're saying being true. It's tragic, in truth.
I lived and worked in the area for four years, working in Pleasant Prairie, living in Kenosha and then Oak Creak. Parent is right, it's a strange place because of the mixture of so many influences: the proximity of Chicago and Milwaukee, a former industrial powerhouse region, access to great education but full of people who've never been to Chicago or Milwaukee (let alone further than them).
My sysadmin had a hobby of creating frankenstein cars. He put the powertrain of a Camaro into the body of Gremlin, for which he needed a second Gremlin to lengthen the chassis by a foot. It was so overpowered he needed a couple hundred pounds of sandbags in the back to give it any traction at all. This sort of thing wasn't that weird either.
Do not trust Foxconn. I strongly believe they're playing a long-term game here.
For example, the Foxconn plant is on a particular tract of land only partially within the Lake Michigan watershed. Anyone living within the watershed must return their water, and it must be cleaned up first. My understanding of the Great Lakes Compact is that Foxconn's land is one of legal ambiguity, that they may draw from Lake Michigan but not return it. I sure hope it doesn't mean they can bottle up Lake Michigan water and ship it elsewhere, but water is set to be more valuable than oil, so I bet they're playing it strategically.
Not to be a naysayer, but do you have any sort of evidence to substantiate this claim? Any evidence of exceptions to laws regarding the usage of the watershed and lake with specific regards to Foxconn? Or any kind of indication that a bottling facility will be built up?
Hard evidence? No. The exact plot of land they chose is not particularly remarkable, so I must wonder why they chose a piece of land straddling the watershed, given that the Compact [1] indirectly applies to corporations.
There's a deeper political aspect to Foxconn's presence that I can't trust. I'm from Wisconsin, and the whole Foxconn deal leaves me feeling extremely uneasy. Leaving aside the Wisconsin and USA politicians associated with the deal, Terry Guo briefly ran for president of the Republic of China. Guo and Foxconn made significant donations to UW-Madison. It smells wrong, and all the Wisconsinites I've talked to agree.
Also a Wisconsinite here. I've been involved with the deal and haven't noticed any care about any watershed related things. Most of the business they've attracted so far are companies who want contract manufacturing outside of mainland China. The large "screen factory" is still largely empty, and they have no concrete plans for it, but the side projects which piggybacked on to that plan have seen some success.
> Terry Guo briefly ran for president of the Republic of China.
I have reservations about Foxconn too, but I’m not sure I understand why this bit is relevant. The Republic of China = Taiwan, a US ally. (Mainland China is the People’s Republic of China). This is akin to Bloomberg running for president.
Why? Is geography or military danger the key element, economic deals, or easy borders?
Taiwan is a vibrant liberal democracy that feels very western. China is a fascist ethnostate.
China is threatening Taiwan's ability to self determine with military force, economic sanctions, and any other means of coercion at their disposal. China has demonstrated it's bad faith via denial of 1 country 2 systems, as well as a pineapple (miliworms) and pineapple cake (ractopamine) ban done clearly in bad faith (not for the reason stated).
The equivalence you have made is absolutely false. The relationship between Taiwan and China, the relationship between foxconn and china, and the releationship between Terry, the KMT, China, and the US, are all quite complicated.
Above it was claimed that Foxconn/Terry are Taiwanese and therefore American Allies, but Foxconn's business is primarily conducted in China and the KMT are definitely the party that China is aiming to corrupt Taiwan's leadership through. It's complicated.
Foxconn is Taiwanese. Wouldn’t Foxconn affiliated people naturally have involvement with Taiwan? Taiwan is our ally. Forget the Middle East for a second. If China was to take TSMC’s factories over. It would be world war 3 most likely.
Not arguing at all--- you got a link for those costs? I always thought desalination was cost prohibitive. I'd be thrilled to know it was 0.1 cents per liter (seriously)!
I am always struck at the amount that states and municipalities are willing to write off in order to attract companies. On one hand, I understand that companies want to take the best deal, but on the other hand, at times local governments are willing to give up so much money in tax revenue. I remember reading about the competitions for Google Fiber and Amazon's second HQ - it felt absurd the amount cities and states were willing to drop, financially speaking.
I'm glad this one has been renegotiated (especially seeing that the proposed plant never happened), but I'd like to see these deals be more level-headed before they get to this point.
They don't have a choice between Amazon HQ or 50 medium sized new businesses, they often have Amazon HQ or nothing new. In that case, whatever they get is more than they have now, isn't it? New jobs that will bring other new businesses and local taxes etc are a bonus.
Places that were serious contenders for Amazon HQ definitely have other employers and options. There is no way that Amazon HQ is ending up in Sioux Falls or Laramie or something.
It looks that way in the end, with no other alternative but to yield, but at some point there were many options, that is how the town, city, county or state came to be in the first place. The problem is that they gave so many concessions just to get a short term political advantage, that real productive and sustainable jobs couldn't compete with corruption.
Now because of the giant snowball made from all the little policy mistakes that sounded insignificant at first, or ever worse, sounded sound! I mean who wouldn't want high paying jobs that barely require any training? the only option in many places is to keep the charade, but at some point politics need to give way to real production, and that only means real competition.
Absolutely. But I don't know anyone who likes having the added traffic that thousands of jobs bring. And increased housing prices. And yada yada. More jobs isnt always positive and at the very least have some downsides.
They're giving up fairness and equality- equal treatment under the law. If the entire state wasn't completely devoid of any entities looking to compete in that space, it probably is now. Anyone making LCD panels in Wisconsin suddenly has a $80,000,000 greater financial gap from their largest competitor. If the lower taxes are good for creating jobs at a net gain to the local economy, then the lower rate should be applied equally among all similarly taxed entities.
> If the lower taxes are good for creating jobs at net gain to the local economy, then the lower rate should be applied equally among all similarly taxed entities.
I agree with the premise here, but in reality, you can see that won't actually work.
You have existing businesses in an area paying a certain amount in taxes. You want to attract a new major business. If you lower your taxes for all the businesses in hopes of attracting the new business, you just lost a huge chunk of revenue for something that might not come to fruition. Whereas if you don't lower your taxes, that new business has no incentive to go with your locale, and will instead, settle somewhere there is an already established talent-base/infrastructure/etc. Furthering the economic inequality between the regions.
I am not a fan of these tax incentives, but I can't blame these places for using them.
I believe luring in corporate giants with payouts collected from existing businesses is short-sighted and wrong both morally and economically. There are existing businesses in Wisconsin, and the way I see it, their current collective tax burden is excessive to the tune of at least $80,000,000.
The government is essentially running around to all of the Davids, collecting a few dollars from each to fund the construction of a tower that puts the Goliath beyond the reach of David's sling. I don't want a government that builds mountains for the largest companies while relegating small businesses to the trenches. I want a government that does everything possible to keep the battlefield level. Innovation rarely comes from the established giants.
There should be research to support this argument. Has anyone found evidence for or against? Otherwise the claim here seems aspirational rather than useful.
I know that the history of stadium deals, for example, this claim is nearly universally made to support incentivizing sports teams - and the evidence nearly universally shows it to be false.
"In every case, the conclusions are the same. A new sports facility has an extremely small (perhaps even negative) effect on overall economic activity and employment. No recent facility appears to have earned anything approaching a reasonable return on investment. No recent facility has been self-financing in terms of its impact on net tax revenues. Regardless of whether the unit of analysis is a local neighborhood, a city, or an entire metropolitan area, the economic benefits of sports facilities are de minimus." [0]
I don't think the comparison to sports stadiums fit here. Usually there is already a stadium for a large NFL team or whatever in the city and the economies in the cities that are large enough to even host these teams are WAY more dynamic than where many factories are being built in the south or midwest.
For example Walmart's HQ was built in a TINY SW Arkansas town. The billions that have been invested there by the company, not only in jobs, but amenities in the city have no comparison to any other option that was available to them. If the city and state wanted to hand Walmart a $100 million dollar check, then that investment would have paid off way more than 10x. (IDK what subsidies they were given, probably none just using this for sake of the argument)
I know WM is the evil empire and I'm not defending all they do, just saying that if the right business moves into your small community it can be worth tens, hundreds or even many billions of dollars to a community that has no other options.
Amazon moving into NYC, or Atlanta giving many millions in subsidies to the Braves for a new stadium? Not really comparable.
The "Tiny town" is 70,000 people who live in an multi-city metro area of around 600,000. That may not be like SF or NYC big, but it's also not just a random metro area. Having lived there for a few years, you're painting with a poetic brush a bit and I'd like to clarify how I see it.
Walmart owns Bentonville. The city council, mayor, and basically anyone there is almost completely subservient to their interests. Again - WM never moved in to the small community, the small community literally is Wal-mart.
For many years, people in the town worked in Wal-mart retail buildings & warehouses around Bentonville. Around 2013 the company started to struggle to compete and found that they needed to attract talent, so the Walton Family Foundation started spending somewhere around $300 million - $400 million a year in improvements and restoration projects. This included massive subsidies for companies that moved in to the area - WFF also paid partially or fully relocation money, but I have no idea how much they paid other than one restaurant owner I spoke to who was basically given moving costs, a building, and "free" rent for a year.
The whole "Wal-mart HQ" thing is just another in their line of tactics to attract new talent in to the area because they are struggling to build an ecosystem of talented developers and analysts. Which, again, there's nothing wrong with this tactic if that's what you're hunting for.
One thing I'll give WM for sure - they are 100% focused on building out a tech bubble for people who want a semi-urban lifestyle. There's a lot of TX & CA transplants and honestly it's working great for them.
All told, none of this is even kind of comparable to Amazon moving to NYC or Atlanta. Nor is it comparable to a company moving in to a small town brand-new.
According to wikipedia the population of Bentonville when the first WM store was built was 2,949.
It's now 54,909, but maybe it's 70k as you say.
Either way it sounds precisely like a situation where a giant corporation moved in to a small town. Or more accurately the tiny store grew into a giant corporation and so did the small town.
My point was merely that many small rural town mayors would love it if a giant corporation would move an HQ with tens of thousands of high paying jobs into their tiny communities! This is why the are willing to give giant incentives to them.
You make great points otherwise, thanks for sharing your perspective!
I didn’t say the comparison was necessarily valid or invalid. I said that evidence for and against you things can exist and should be brought when claims are made.
The only comparison I am making is that virtually identical claims are made about stadium deals and the evidence suggest the opposite of those claims is true.
I would just like these claims to be evaluated and assessed using evidence not accept it is true because they fit within the narrative that is presented every single time a company wants a tax break
> For example Walmart's HQ was built in a TINY SW Arkansas town.
I understand what you're saying here, but Walmart is a really bad example here. They started in Bentonville in the 50's as a tiny shop and the city grew with their growth - their decision to stay in "a little town in Arkansas" was organic.
That's a later conception of Brandeis isn't it? Think of the early political cartoon of a snake cut into 13 pieces that needed to join to defeat the British, not experiment in competition against each other to win the war by subsidizing the largest existing concentrated owners to entice them to their state with corporate welfare.
Or, company comes here, pays their employees less than expected, and leaves sooner than expected with the local taxpayers on the hook paying for more infrastructure than they need - and maybe some bonus pollution to deal with for decades.
These deals are always more complicated than the initial marquee numbers and that usually seems to make them less favorable for the area than hoped because companies have greater experience and can play desperate municipalities off against each other with little consequence for not delivering.
Roads and infrastructure don't pay for themselves and considering the scale of some incentive packages offered and the paltry outcomes like the one we're discussing in Wisconsin and elsewhere the assertion that there's a "net gain" deserves serious scrutiny and supporting evidence.
I don't understand why people keep downvoting this sentiment. Cities have two options:
(1) Attract a business that wouldn't otherwise come, which when it exists will attract more people that pay state/local sales taxes and increase demand for property, which in turn increases property price, which increases property taxes.
(2) Don't attract the business. . . .. nothing comes after that.
And once again the law of the excluded middle strikes. No, the only two options are not the ones you suggest. The other option, that you conveniently ignore, is that cities build a good infrastructure that attracts talent and the businesses come to either serve the talent or employ the talent -- no subsidy needed.
By now there must be entire libraries, or at least large warehouses, filled with case studies from HBS and similar schools that show state and municipal tax incentives are ALWAYS a bad deal for the city and state finances. The only purpose they serve is to make a politician appear effective and to enable that politician and his or her cronies to collect a bit of graft.
> The other option, that you conveniently ignore, is that cities build a good infrastructure that attracts talent and the businesses come to either serve the talent or employ the talent -- no subsidy needed.
How do cities pay for that good infrastructure? either with tax revenue or debt (bond). Very often cities want to attract businesses precisely because their commercial base is in decline, with very little room to hike tax. As for debt, such a city may have low credit score making it hard to get loans, or being saddled with high interest rate.
Giving incentive to businesses allows them to stabilize long term revenue, at the same time adding local jobs. That's the theory. The reality of course include both good and bad examples of such scheme. Foxconn is a bad example.
> but I'd like to see these deals be more level-headed before they get to this point.
I don't think that's possible considering the incentives at play. Politicians always have the next election in mind, and what better way to try to win it then sign a deal that promises jobs? Doesn't matter if the numbers bandied about are too good to be true --- just get pen to paper and point the finger at your opponent and decry him as anti-business.
> On July 16, 2019, President Trump announced his intent to appoint Walker to be a Member (Private Life) of the Board of Trustees of the Woodrow Wilson International Center for Scholars in the Smithsonian Institution
You get taxes in other ways through new building permits, higher property taxes, local sales tax, etc...there is more going on than just collecting corporate taxes in a municipality. The more people you draw the better your overall tax revenue is...and the taxes you are willing to put off are limited in time and generally expire after 5-10 years.
It's not really a problem for the partners in the joint private/public venture. It is a problem for the next jurisdiction that is now facing companies' expectations of massive incentives, for the existing residents and businesses that are paying normal taxes because they aren't new, for any but the largest businesses who don't have lobbyists on staff, etc.
There's also the general wisdom that life is better when you're competing to offer more value for more money, not just cutting costs as far as you can
I see your point and agree that from the fairness point of view this is not quite right. However, I do not see fairness as relevant in this context. Unless it is Walmart that is getting tax breaks for building a bunch of stores in NYC, local businesses do not oppose big companies getting incentives to move in.
Perhaps they don't but I'm not as focused on the relationship between the company and jurisdiction, I'm talking about the externalities.
Desperate places give away the store to get anything at all, and it depresses what companies are willing to offer the next place while also tilting the playing field toward big companies with the ability to negotiate these kind of deals.
It would be corruption if he personally benefits from the project, e.g. by selling land to Foxconn. I don't know the specific details to know if it really was a case of corruption.
- The deal negotiated by former governor Scott Walker was expected to cost taxpayers between $172k and $290k in government funding per job created. [0]
- $80 million for 1,454 employees, the provisions of the updated deal per TFA, is $55k each.
- The US average cost of similar programs is $24k. [0]
It's not obvious whether this is a good deal, but unlike the original it's not obviously a bad deal.
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[ 1.8 ms ] story [ 275 ms ] threadJust curious as I am seeing more of this on HN lately or is it just the Baader Meinhof phenomenon after I read someone else complain about the recent downvoting phenomenon for stating the obvious. Has the readership changed of HN or more specifically the commentariat?
https://www.reuters.com/article/us-foxconn-wisconsin-exclusi...
He said the company was still evaluating options for Wisconsin, but cited the steep cost of making advanced TV screens in the United States, where labor expenses are comparatively high.
“In terms of TV, we have no place in the U.S.,” he said in an interview. “We can’t compete.”
Foxconn has factories in Mexico, Chennai, Malaysia etc. which produce a significant amount of devices but I doubt a factory in US will take off. This article from 2012 about the Steve Jobs "These jobs are not coming back" remark is probably still true: https://www.nytimes.com/2012/01/22/business/apple-america-an...
It's more plausible that any company will give the more acceptable, easily digestible explanation, rather than the real one.
But really it's the politicians who won, first by banging their chests for all the investments and jobs they created, now for getting an easy out. They can't be blamed for not seeing through any ploy because they can argue Foxconn obviously had good intentions sabotaged by "a misunderstanding" that couldn't have been caught.
It's very unlikely (by that I mean close to impossible) that Foxconn just "blundered", went through many rounds of negotiations, and started building, while genuinely not being aware that the US labor market is different from the Chinese one.
Large companies are unlikely to ever tell the truth about their motivations, but they're even less likely to when they were doing something manipulative and dishonest, as Foxconn was here.
My personal impression is, that it got a lot worse since Covid, which I attribute to more people doing home office and/or having more free time. Any discussion forum that grows gets worse.
But both my impressions and the 2nd part might be wrong.
I have observed that any comments criticizing anyone, regardless of wether they are justified or not seem to be recieved poorly on modern forums.
I believe this is due to an ongoing effort to make forums safe spaces, somehow honest critical thinking is no longer accepted in the current environment. Right or wrong, it is what it is.
So if You are really concerned with the fake points You are accumulating then just tow the line, get with the woke SJW movement or submit articles of interest to balance out the backlash from the mob....I probably better start looking for a good article :P
https://en.wikipedia.org/wiki/Toe_the_line
Huh! I hadn’t thought about it in such stark terms before, and I’d like to disagree, but there may be something in that.
Is that an original thought, or did you get it from somewhere? It sounds like something that should be an eponymous law.
It’s very visible on Reddit. Large subreddits have either very strict moderation, or they are low quality (I’m excepting picture subs here because they work differently)
They weren't some naive tiny company.
The alternate take is that the whole deal was made in bad faith and FoxConn was hoping to collect subsidies and line its pockets. This version of events has some precedent[1]. It's especially hard to believe that FoxConn didn't know about US labor when this same situation played out in Pennsylvania in 2013[2].
[1] https://www.marketwatch.com/story/foxconns-history-of-broken...
[2] https://www.washingtonpost.com/business/economy/how-foxconns...
So that leaves either bad faith, or they are just abjectly incompetent. I can't really see any other options. Or, again, am I way off base?
Especially one that is a specialist in harvesting laborers from all corners of the world. I can only imagine selecting the right labor force has to be their main competences.
My smartphone will never be assembled in the US or Germany.
If you look from the outside, as a society we are using a lot of our best brains for very frivolous things. I wish for a more efficient way of using our minds!
(No relation to the company, though I did once have a very nice chat with Todd Weaver).
And to the larger point: I agree completely that politicians opening their mouths about jobs (and also about anything else, IMO) is bad faith bullshit.
https://www.theverge.com/21507966/foxconn-empty-factories-wi...
My take it was probably mainly a political stunt, lcd was never really possible (slump + wages + supply issues) and then they didn't know what to do.
Meanwhile, people at large don't follow progress of these endeavors. Some journalists may but there's selection bias from the journalist and the news consumer as to what they ultimately see and stay informed of. These stunts are forgotten by most (myself included) in the daily scramble of things we have to keep track of and manage. Did it fail? Did it succeed? Do I even remember it or just the emotion it attributed to something else I actually do remember?
Ambiguity hiding in complexity of daily life lets people say and do a lot of things and get away with it. It's often far too difficult and time consuming to unravel the ambiguity and complexity to show if something succeded, failed, or to even have cognitive capacity to keep track of. The end result, as you point out, is political capital people walk away with. The emotional impression at the time is what was sold and stuck to most people. "MAGA", "bringing back manufacturering", links to nostalgic economic golden eras for many workers.
Think about it from Foxconn's perspective, if you got a sweetheart deal and the person who gave it to you got canned for it, are you going to follow thru and put in billions of your dollars on the assumption that you'll still get billions of government subsidies in return?
There was quite a controversy over the environmental impact of this plant. The "word on the street" is that LCD manufacturing is a dirty industry requiring a lot of water.
edit I should add that I believe that spreading that kind of message has geopolitical implications, and that groups might want to create that image for strategic reasons.
Essentially, Foxconn thought that the Wisconsin deal would work more typically as its deals in China went. Glad-hand the government officials, get sweetheart deals on land and investment, and as long as you're not totally incompetent in making use of it, they won't care what you do with it, even if you fail to live up to the original promises. It's not clear to me that Foxconn actually seriously considered producing LCD screens here given this light; the announcement would have been more to make Walker and other government officials ecstatic about the deal than an actual commitment to follow through. The fact that outrage towards the deal would lead to Walker losing reelection and his successor keeping a much closer eye on performance (or lack thereof) seems to me to have caught Foxconn completely off-guard.
I think there's another level going here in relation to internal Foxconn politics, but my recollection is too hazy to make a coherent explanation, and I don't want to make any false accusations here, so I won't go into any more detail.
https://www.theverge.com/21507966/foxconn-empty-factories-wi...
I always get confused, I find it much easier to say "by 97%".
This is especially evident in the mental gymnastics required to understand retail sales pricing. How good is a "Buy two, get one 50% off!!" deal? Brains easily give up on the hard questions and substitute easy answers. "What's it actually worth? Bought one at another store last month, do difficult pricing history memory, or easy answer, the original price is listed right there. How good is the deal? Complicated math, or easy answer, it's at least a good enough deal to merit a big sign, bright colors, and two exclamation points. And it's good for a limited time only? Better not miss out, buy now!"
Here, the scope of the reduction is kind of irrelevant. They basically scrapped the old deal and tried to write a new, smaller one. Had they scrapped the megafactory plans and decided to open a fast food franchise it could have been reduced a million fold!
The new agreement offers $80M and asks Foxconn to spend only $672M on a factory that will employ only 1,454 people by 2025. The original deal offered Foxconn $2.85B (or $2850M) to spend $10B ($10000M) and hire 13,000 by 2032. Big numbers are hard, but running the math it's now $55k/job and $0.13/dollar of capital investment, it was $220k/job and $0.285/dollar. $80M is 2.8% or a 30-fold reduction from $2.85B, but the full story is they've simultaneously reduced the ratios of the incentives and the scope of the required investment.
A complete understanding of what those numbers mean is really hard to develop, and isn't really distilled by a substitution in the headline of 30-fold to 30x. Human brains in general are busy and don't like to work too hard, and whether we use "30 fold" like "four score" in our daily vernacular or they say 97% and 80, the headline's effect is the same. It conveys to readers who don't want to run all the numbers about average salaries and payroll taxes and capital depreciation and so on that the previous administration tried to offer an excessively generous deal but the current government has rolled that back to something a lot smaller, don't worry about exactly how much but just trust that it's a lot.
Increase by 100% is 2x
Fold decreases are parabolic, fold increases are linear.
Calling it a 5-fold, 10-fold or 20-fold decrease makes the difference between them much more immediately obvious, IMO.
Its similar with the miles/gallon vs. liters/100km metrics for fuel consumption, where one of them just seems immediately more intuitive to grasp and use (to me).
Maybe it is similar to miles/gallon vs liters/100km and depends on where you grew up. I feel like the usage frequency changed, but it could just be that I'm noticing it more.
It's just like how saying something is "95% effective" sounds very convincing until you realize that's a 1-in-20 failure rate.
So one of them had 50% more fat than the other, but they both look pretty close to "Fat Free"
https://www.marketwatch.com/story/foxconns-history-of-broken...
https://boingboing.net/2017/08/09/potemkin-factories.html
https://urbanmilwaukee.com/2017/08/20/op-ed-the-many-broken-...
Basically what they do is build themselves up through something like a social capital pyramid scheme. This eventually collapses when there are no greater fools and when all their promises fail, but the good ones already have the next grift in progress before the first one collapses.
Trump is truly one of the greats at this. Not only does he do this very well but he builds the next grift off the previous one. He's IMHO the world's premier expert in "failing up."
...for the 7th time?
Great at marketing, terrible at execution.
Which I always find a bit surprising because you'd think people here would be able to see through the hucksterism.
Self-righteously holding your nose and voting for a dumpster fire is still voting for a dumpster fire.
*And perhaps getting immunity.
You won't license a brand that already scrunes >50% of potential customers in the US is and way more in the western world ( but the contacts seem to be solid, so it's very expensive)
Look at all the hotels trying to get off the Trump brand. And all the businesses that associated themselves with Trump during his presidency.
Jeez. In all of my marketing efforts I would never immediately out of the gate alienate 60-65% of my potential customer base. And the Trump brand did nearly that from day 1.
Consider instead something along the lines of "it achieved the desired political benefit for certain politicians". By keeping it abstract, even if it can be deduced who you're referring to, the discussion can remain less adversarial.
was probably impactful on Wisconsonian's move away from Trump in both the midterms and in 2020. I don't know of any polling that connects the two but the foxconn disaster was a frequent topic of conversation here.
https://gimletmedia.com/shows/reply-all/wbhjwd
I still like to believe that most of the people around there are good and mean well, but it gets harder and harder every day to believe the willful ignorance they possess of economic, societal, and cultural issues at hand, here and now, will fade. But there's hope. Younger leaders are working their way into local government (hi Greta!), especially over in the formal City of Racine. There's hope that Racine and Racine County might be a leader of progressive values in the area.
As an aside, I think there's oodles of opportunity in the SE WI area for younger folks. It really is a beautiful place, is near to Chicago and Milwaukee, and is inexpensive. You get all four seasons, for better or worse. I think it's better than SF's summer and grey-chillier-summer. Some joke that the four seasons are winter, construction, construction, and construction, but that's an exaggeration. Anyway, I think an influx of more diverse people in background and ideology could really stimulate an area like SE WI. Add to that making it worth young people staying around instead of fleeing to the coasts, and suddenly Racine can be a really cool place.
This whole Foxconn thing just makes me so sad, and angry.
Americans classically derive much of their sense of value from:
1. Work
2. Race (for many white people, especially historically)
...and that's about it. Unlike other cultures our "rugged individualism" means that we don't tend to derive as much sense of worth from family, traditions, organizations we belong to, etc. This is especially true for men who are raised to believe that who they are is what they do.
The economic shift to a service- and knowledge-based economy with many manufacturing and ag jobs being automated or outsourced away has devastated 1. in many communities. The march towards better civil rights and equality is chipping away at 2.
This has left a huge number of Americans feeling that they are worth less than they used to be. People like that are ripe for being exploited. People will buy anything if you tell them you're selling dignity. Trump's "Make America Great Again" slogan was really "Make You Feel Like You're Great Again".
I agree with the overall premise, but there is a single notable exception to to this, which is the military, which is the intersection of family, traditions, and government organizations. But even there, as we have seen recently, there is a white nationalism problem afoot.
>Americans classically derive much of their sense of value from:
> 1. Work
> 2. Race (for many white people, especially historically)
> ...
> People will buy anything if you tell them you're selling dignity.
All true, and it's important that politicians who hope to actually heal these folks focus their efforts on restoring the dignity that comes from work and community, and dispel the dangerous sort of "dignity" peddled by ethnic/racial nationalists.
This is a bit of cognitive dissonance I find fascinating among the far right. I have had conversations with many people who clearly simultaneously believe:
1. The government can't do anything right.
2. We have the world's best military.
And yet for most it hasn't seemed to click that the military is a government program.
But, again, I think this gets to my larger point that because the military is such a source of prestige for many Americans (especially poorer ones with few other upward mobility options), they are able to maintain that bit of cognitive dissonance.
(And, to be clear, I absolutely do not think conservatives have a monopoly on cognitive dissonance. I see many different ones all along the political spectrum.)
As a tribal primate species are absolutely hard-wired to seek ways to provide value to our tribe. Being worthless to the tribe means being left in the forest, which was a death sentence to our evolutionary ancestors. So our need for social prestige is as fundamental as food and shelter. Perhaps even more so since for most of our ancestors, food and shelter came from the tribe.
The ways we seek out that esteem are determined by our surrounding culture. If esteem is the game we're trying to win, culture determines the board and the moves we're allowed to make. We can push against culture somewhat and it evolves over time, but we're largely stuck with the one we're enmeshed in.
So you get a set of people who need to feel valued. You raise them in a culture that says the main way to do that is by having a well-paying job. Then you take away the jobs. This is a recipe for unrest and strife.
My sysadmin had a hobby of creating frankenstein cars. He put the powertrain of a Camaro into the body of Gremlin, for which he needed a second Gremlin to lengthen the chassis by a foot. It was so overpowered he needed a couple hundred pounds of sandbags in the back to give it any traction at all. This sort of thing wasn't that weird either.
(RIP Reply All, you'll be missed)
For example, the Foxconn plant is on a particular tract of land only partially within the Lake Michigan watershed. Anyone living within the watershed must return their water, and it must be cleaned up first. My understanding of the Great Lakes Compact is that Foxconn's land is one of legal ambiguity, that they may draw from Lake Michigan but not return it. I sure hope it doesn't mean they can bottle up Lake Michigan water and ship it elsewhere, but water is set to be more valuable than oil, so I bet they're playing it strategically.
https://www.wiscontext.org/what-foxconn-means-great-lakes-co...
There's a deeper political aspect to Foxconn's presence that I can't trust. I'm from Wisconsin, and the whole Foxconn deal leaves me feeling extremely uneasy. Leaving aside the Wisconsin and USA politicians associated with the deal, Terry Guo briefly ran for president of the Republic of China. Guo and Foxconn made significant donations to UW-Madison. It smells wrong, and all the Wisconsinites I've talked to agree.
I'm glad their subsidies were slashed.
[1] https://www.gsgp.org/media/1330/great_lakes-st_lawrence_rive...
I have reservations about Foxconn too, but I’m not sure I understand why this bit is relevant. The Republic of China = Taiwan, a US ally. (Mainland China is the People’s Republic of China). This is akin to Bloomberg running for president.
Also it’s Terry Gou and not Guo.
Taiwan is a vibrant liberal democracy that feels very western. China is a fascist ethnostate.
China is threatening Taiwan's ability to self determine with military force, economic sanctions, and any other means of coercion at their disposal. China has demonstrated it's bad faith via denial of 1 country 2 systems, as well as a pineapple (miliworms) and pineapple cake (ractopamine) ban done clearly in bad faith (not for the reason stated).
The equivalence you have made is absolutely false. The relationship between Taiwan and China, the relationship between foxconn and china, and the releationship between Terry, the KMT, China, and the US, are all quite complicated.
Above it was claimed that Foxconn/Terry are Taiwanese and therefore American Allies, but Foxconn's business is primarily conducted in China and the KMT are definitely the party that China is aiming to corrupt Taiwan's leadership through. It's complicated.
https://en.wikipedia.org/wiki/Terry_Gou#Political_career
To say Foxconn is complicated would be an understatement.
Desalination costs less than 0.1 cents per liter, so that sets a pretty firm price cap on the cost of water.
e.g. https://www.sciencedirect.com/science/article/abs/pii/S00119...
"current [published in 2008] large-scale desalination plants are capable of producing water in the range of $0.50–$2.00/m3"
0.1 cents per liter is cost prohibitive for use cases where water is typically measured by the acre-foot.
I'm glad this one has been renegotiated (especially seeing that the proposed plant never happened), but I'd like to see these deals be more level-headed before they get to this point.
Now because of the giant snowball made from all the little policy mistakes that sounded insignificant at first, or ever worse, sounded sound! I mean who wouldn't want high paying jobs that barely require any training? the only option in many places is to keep the charade, but at some point politics need to give way to real production, and that only means real competition.
It’s still a net gain to have a major employer in your locale, along with all the other economic benefits and tax revenue that entails.
I agree with the premise here, but in reality, you can see that won't actually work.
You have existing businesses in an area paying a certain amount in taxes. You want to attract a new major business. If you lower your taxes for all the businesses in hopes of attracting the new business, you just lost a huge chunk of revenue for something that might not come to fruition. Whereas if you don't lower your taxes, that new business has no incentive to go with your locale, and will instead, settle somewhere there is an already established talent-base/infrastructure/etc. Furthering the economic inequality between the regions.
I am not a fan of these tax incentives, but I can't blame these places for using them.
The government is essentially running around to all of the Davids, collecting a few dollars from each to fund the construction of a tower that puts the Goliath beyond the reach of David's sling. I don't want a government that builds mountains for the largest companies while relegating small businesses to the trenches. I want a government that does everything possible to keep the battlefield level. Innovation rarely comes from the established giants.
I know that the history of stadium deals, for example, this claim is nearly universally made to support incentivizing sports teams - and the evidence nearly universally shows it to be false.
"In every case, the conclusions are the same. A new sports facility has an extremely small (perhaps even negative) effect on overall economic activity and employment. No recent facility appears to have earned anything approaching a reasonable return on investment. No recent facility has been self-financing in terms of its impact on net tax revenues. Regardless of whether the unit of analysis is a local neighborhood, a city, or an entire metropolitan area, the economic benefits of sports facilities are de minimus." [0]
[0] https://www.brookings.edu/articles/sports-jobs-taxes-are-new...
For example Walmart's HQ was built in a TINY SW Arkansas town. The billions that have been invested there by the company, not only in jobs, but amenities in the city have no comparison to any other option that was available to them. If the city and state wanted to hand Walmart a $100 million dollar check, then that investment would have paid off way more than 10x. (IDK what subsidies they were given, probably none just using this for sake of the argument)
I know WM is the evil empire and I'm not defending all they do, just saying that if the right business moves into your small community it can be worth tens, hundreds or even many billions of dollars to a community that has no other options.
Amazon moving into NYC, or Atlanta giving many millions in subsidies to the Braves for a new stadium? Not really comparable.
Minor correction: Walmart's HQ is in NW Arkansas (Bentonville)
Walmart owns Bentonville. The city council, mayor, and basically anyone there is almost completely subservient to their interests. Again - WM never moved in to the small community, the small community literally is Wal-mart.
For many years, people in the town worked in Wal-mart retail buildings & warehouses around Bentonville. Around 2013 the company started to struggle to compete and found that they needed to attract talent, so the Walton Family Foundation started spending somewhere around $300 million - $400 million a year in improvements and restoration projects. This included massive subsidies for companies that moved in to the area - WFF also paid partially or fully relocation money, but I have no idea how much they paid other than one restaurant owner I spoke to who was basically given moving costs, a building, and "free" rent for a year.
The whole "Wal-mart HQ" thing is just another in their line of tactics to attract new talent in to the area because they are struggling to build an ecosystem of talented developers and analysts. Which, again, there's nothing wrong with this tactic if that's what you're hunting for.
One thing I'll give WM for sure - they are 100% focused on building out a tech bubble for people who want a semi-urban lifestyle. There's a lot of TX & CA transplants and honestly it's working great for them.
All told, none of this is even kind of comparable to Amazon moving to NYC or Atlanta. Nor is it comparable to a company moving in to a small town brand-new.
[ed: oops missed an important sentence!]
It's now 54,909, but maybe it's 70k as you say.
Either way it sounds precisely like a situation where a giant corporation moved in to a small town. Or more accurately the tiny store grew into a giant corporation and so did the small town.
My point was merely that many small rural town mayors would love it if a giant corporation would move an HQ with tens of thousands of high paying jobs into their tiny communities! This is why the are willing to give giant incentives to them.
You make great points otherwise, thanks for sharing your perspective!
The only comparison I am making is that virtually identical claims are made about stadium deals and the evidence suggest the opposite of those claims is true.
I would just like these claims to be evaluated and assessed using evidence not accept it is true because they fit within the narrative that is presented every single time a company wants a tax break
I understand what you're saying here, but Walmart is a really bad example here. They started in Bentonville in the 50's as a tiny shop and the city grew with their growth - their decision to stay in "a little town in Arkansas" was organic.
https://en.wikipedia.org/wiki/History_of_Walmart
People this it’s a choice between: A) company moves here pays $0 in tax or B) company moves here and pays $5M in tax.
When in reality it’s a choice between: A) company comes here and pays $0 in tax or B) company doesn’t come here and net taxes are still $0
These deals are always more complicated than the initial marquee numbers and that usually seems to make them less favorable for the area than hoped because companies have greater experience and can play desperate municipalities off against each other with little consequence for not delivering.
A) company comes here and pays $0 in tax. and city "took on hundreds of millions in debt that was supposed to be repaid by property taxes".
B) company doesn’t come here and net taxes are still $0. city doesnt take on more debt.
B looks better.
[1] https://www.theverge.com/21507966/foxconn-empty-factories-wi...
(1) Attract a business that wouldn't otherwise come, which when it exists will attract more people that pay state/local sales taxes and increase demand for property, which in turn increases property price, which increases property taxes.
(2) Don't attract the business. . . .. nothing comes after that.
By now there must be entire libraries, or at least large warehouses, filled with case studies from HBS and similar schools that show state and municipal tax incentives are ALWAYS a bad deal for the city and state finances. The only purpose they serve is to make a politician appear effective and to enable that politician and his or her cronies to collect a bit of graft.
How do cities pay for that good infrastructure? either with tax revenue or debt (bond). Very often cities want to attract businesses precisely because their commercial base is in decline, with very little room to hike tax. As for debt, such a city may have low credit score making it hard to get loans, or being saddled with high interest rate.
Giving incentive to businesses allows them to stabilize long term revenue, at the same time adding local jobs. That's the theory. The reality of course include both good and bad examples of such scheme. Foxconn is a bad example.
I don't think that's possible considering the incentives at play. Politicians always have the next election in mind, and what better way to try to win it then sign a deal that promises jobs? Doesn't matter if the numbers bandied about are too good to be true --- just get pen to paper and point the finger at your opponent and decry him as anti-business.
he was rewarded with a sinecure.
It's literally a race to the bottom, and for some reason people are eager to win!
There's also the general wisdom that life is better when you're competing to offer more value for more money, not just cutting costs as far as you can
Desperate places give away the store to get anything at all, and it depresses what companies are willing to offer the next place while also tilting the playing field toward big companies with the ability to negotiate these kind of deals.
In other terms, grey's law applies here: Any sufficiently advanced incompetence is indistinguishable from malice
The payoff could be very hard to find, but the malfeasance in public office is clear as day.
Just like a sales driven tech company. Heroes for booking sales. Score fat commission. Loser developers and clients are left holding the bag.
on Jan 22, 2017 - https://news.ycombinator.com/item?id=13457176
on Jan 16, 2018 - https://news.ycombinator.com/item?id=16163558
on April 14, 2018 - https://news.ycombinator.com/item?id=16839542
on Oct 29, 2018 - https://news.ycombinator.com/item?id=18328772
on April 12, 2020 - https://news.ycombinator.com/item?id=22850723
- The deal negotiated by former governor Scott Walker was expected to cost taxpayers between $172k and $290k in government funding per job created. [0]
- $80 million for 1,454 employees, the provisions of the updated deal per TFA, is $55k each.
- The US average cost of similar programs is $24k. [0]
It's not obvious whether this is a good deal, but unlike the original it's not obviously a bad deal.
[0] https://research.upjohn.org/cgi/viewcontent.cgi?article=1244...