Remember all the hoopla about Scott Walker’s deal with Foxconn? As the New Yorker summarized it,
When it was signed, less than two years ago, the deal that Wisconsin struck with the electronics giant Foxconn contained all kinds of headline-grabbing numbers: the company promised a ten-billion-dollar investment in the state, a new 21.5-million-square-foot campus for manufacturing L.C.D. screens, and as many as thirteen thousand new jobs, paying an average wage of fifty-four thousand dollars a year. The manufacturing facility would be the Taiwan-based company’s first U.S. factory, and the prospect stirred the hopes of a region that still dreams of clawing back the middle-class factory jobs that were its pride in the middle of the twentieth century and that it lost to foreign competition long ago. As Dan Kaufman wrote for The New Yorker last year, the deal also appeared poised to give a boost to the reëlection prospects of Scott Walker, the conservative Republican who was then Wisconsin’s governor, who transformed the state into a bastion of conservative, free-market politics.
Scott Walker’s version of free markets differs rather considerably from mine; giving huge subsidies via tax abatements and other government goodies to large enterprises hardly equates to a competitive marketplace where manufacturers and sellers contend on equal terms with others.
Trump, of course, applauded the announcement as evidence that he–the self-described great dealmaker– was bringing manufacturing back to the U.S. (although from what I read, he had nothing to do with making the deal originally).
As the details of Walker’s great coup leaked out, and Wisconsin citizens found out what the state had promised, the coverage became considerably less rosy.
But since then Wisconsinites have found out a lot more about the $4.5 billion in taxpayer subsidies that Foxconn was promised—money the company was being given despite the dramatic cuts that the state has made, in recent years, to education, infrastructure, and other public spending—along with the pollution waivers and special legal privileges that it was granted and the bulldozing of neighborhoods that it needed to acquire the land it wanted.
Those details helped defeat Walker in the gubernatorial election. But the state was still on the hook for the promised subsidies.
To add insult to injury, the company recently–and significantly– backpedaled on its commitments, telling Reuters it isn’t even going to manufacture in Wisconsin, and will employ mainly research and development workers. As a result, some of the incentives the state originally promised will be left on the table, but others are irreversible. Millions of dollars of highway money have already been redirected to support Foxconn’s project, and a number of homeowners have been “cleared” from the area designated for the factory.
Time Magazine reported that, following a telephone call from Trump in the wake of the no-manufacturing announcement, the company said it would build a smaller factory after all.
I wonder what Trump promised them.
The Foxcomm scandal is just a particularly egregious example of corporate welfare; bribery ( subsidies and an absence of regulation) has become a commonplace element of what is delicately called “economic development.”
This clusterf**k is simply added evidence that America’s economic system is corporatism, not market capitalism. The dictionary defines corporatism as the control of a state or organization by large interest groups, and adds that “fascism was the high point of corporatism.”
Real capitalists are screwed.