Linked by Thom Holwerda on Sun 4th Nov 2018 21:22 UTC
In the News

It was supposed to be a big win for the state of Wisconsin: Foxconn was going to build a massive LCD factory in the state, raking in a massive state subsidy. Fast-forward a few years, and little seems to have come of the deal.

But what seemed so simple on a napkin has turned out to be far more complicated and messy in real life. As the size of the subsidy has steadily increased to a jaw-dropping $4.1 billion, Foxconn has repeatedly changed what it plans to do, raising doubts about the number of jobs it will create. Instead of the promised Generation 10.5 plant, Foxconn now says it will build a much smaller Gen 6 plant, which would require one-third of the promised investment, although the company insists it will eventually hit the $10 billion investment target. And instead of a factory of workers building panels for 75-inch TVs, Foxconn executives now say the goal is to build "ecosystem" of buzzwords called "AI 8K+5G" with most of the manufacturing done by robots.

Polls now show most Wisconsin voters don't believe the subsidy will pay off for taxpayers, and Walker didn't even mention the deal in a November 2017 speech announcing his run for re-election. He now trails in that re-election bid against a less-than-electric Democratic candidate, the bland state superintendent of public instruction Tony Evers.

It all seemed so promising. So how did everything go so bad so quickly?

The jobs supposedly created through this deal would cost the state government over 300,000 dollar per job - which is an absolutely terrible investment. In order to get there, Foxconn received special exemptions from environmental rules and regulations, raising concerns about pollution.

Also, but unrelated, boondoggle is a great word.

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Another great word
by JLF65 on Sun 4th Nov 2018 21:54 UTC
JLF65
Member since:
2005-07-06

Also, but unrelated, boondoggle is a great word.


Another is 'hornswoggled', which is what they were. ;)

Reply Score: 3

RE: Another great word
by ssokolow on Sun 4th Nov 2018 23:16 UTC in reply to "Another great word"
ssokolow Member since:
2010-01-21

Another is 'hornswoggled', which is what they were. ;)


Gotta love fun words. I actually collect them.

Another one would be gadzookery, which is, sadly, what so many of these nifty words are becoming.

Edited 2018-11-04 23:16 UTC

Reply Score: 2

RE[2]: Another great word
by Kochise on Mon 5th Nov 2018 03:19 UTC in reply to "RE: Another great word"
Kochise Member since:
2006-03-03

Please let these words come in, that's gems for Scrabble, at least I would have support when I place those unused letters and everybody tells me the combination doesn't makes a real word. Now these are.

Reply Score: 3

RE[3]: Another great word
by emojim on Mon 5th Nov 2018 03:51 UTC in reply to "RE[2]: Another great word"
emojim Member since:
2018-08-07

Please let these words come in, that's gems for Scrabble, at least I would have support when I place those unused letters and everybody tells me the combination doesn't makes a real word. Now these are.


That's when you tell them to stop all the flapdoodle and play their word. ;)

Edited 2018-11-05 03:53 UTC

Reply Score: 2

RE[3]: Another great word
by judgen on Mon 5th Nov 2018 06:40 UTC in reply to "RE[2]: Another great word"
judgen Member since:
2006-07-12

My favourite scrabble word is "QUIXOTRY" it is the highest played single turn word in the american championships ever. 365pts

Reply Score: 2

RE: Another great word
by WorknMan on Mon 5th Nov 2018 00:34 UTC in reply to "Another great word"
WorknMan Member since:
2005-11-13

Boondoggle is okay, but 'brouhaha' and 'scuttlebutt' are annoying ;)

Reply Score: 2

RE[2]: Another great word
by Bill Shooter of Bul on Tue 6th Nov 2018 13:37 UTC in reply to "RE: Another great word"
Bill Shooter of Bul Member since:
2006-07-14

How do you feel about "donnybrook"? I think its the best.

Reply Score: 2

Careful on Subsidies
by Yamin on Mon 5th Nov 2018 00:05 UTC
Yamin
Member since:
2006-01-10

The other thing is incentives are complex.
There's direct incentives. Like here Company, we give you 1 billion dollars and you build a plant and employ X workers...

There's also incentives which really don't cost the state much.

For example, if a state says Company we exempt you from paying property taxes for 10 years as a value of 1 billion dollars. That might not cost the state much. At worst you can think of in a big city like New York, where property is expensive, sure you can definitely get a more tangible cost of lost revenue... as you could theoretically have that space used by another company who would pay property tax. But for say Wisconsin, there might not be another company who would pay that much property tax, so it's not like the state would have 1 billion in property tax revenue otherwise.

The other more real costs like roads/infrastructure that would otherwise not need to be built.

Then you consider the plus side of workers and additional tax revenue they bring (income/property/sales...)

It's a crazy equation on if it's a good deal or not.
It's just rarely as simple as thinking the government is handing foxconn 4 billion dollars.

Reply Score: 3

RE: Careful on Subsidies
by Alfman on Mon 5th Nov 2018 01:00 UTC in reply to "Careful on Subsidies"
Alfman Member since:
2011-01-28

Yamin,

The other thing is incentives are complex.
There's direct incentives. Like here Company, we give you 1 billion dollars and you build a plant and employ X workers...

There's also incentives which really don't cost the state much.

For example, if a state says Company we exempt you from paying property taxes for 10 years as a value of 1 billion dollars. That might not cost the state much. At worst you can think of in a big city like New York, where property is expensive, sure you can definitely get a more tangible cost of lost revenue... as you could theoretically have that space used by another company who would pay property tax. But for say Wisconsin, there might not be another company who would pay that much property tax, so it's not like the state would have 1 billion in property tax revenue otherwise.


I disagree, whether it's subsidizing apple/google/amazon/foxconn to open up a new facility, or subsidizing construction costs for privately owned sports stadiums, etc, it costs us tons of public money that we never get back. The long term net effect, every time, is that our governments incur more debt and must decrease services to make up for the shortfall. This contributes to a lower quality of life for most, while it enables a privileged few wealthy corporations to laugh all the way to the bank without having to take on risk or pay their fair share.


Then you consider the plus side of workers and additional tax revenue they bring (income/property/sales...)


If a tax discount has positive effects, then it needs to be offered without discrimination. A system where the privileged can get their taxes dismissed is corrupt as hell.


It's a crazy equation on if it's a good deal or not.
It's just rarely as simple as thinking the government is handing foxconn 4 billion dollars



Foxconn shouldn't get any special privileges, not one dollar! I welcome the competition, but if they cannot do so fairly, then they don't deserve a handout and they don't deserve to be here at our expense. Granting giant corporate subsidies is a total slap in the face to smaller companies who have to work harder and have to pay more to subsidize the largest competitors. This is one of those topics that really gets under my skin.

Reply Score: 9

Foxconns history
by Windows Sucks on Mon 5th Nov 2018 02:33 UTC
Windows Sucks
Member since:
2005-11-10

They have done this in the past!

The Administration did this to make a quick win like they are about making things happen. Truth is it was BS to make Walker look good and Trump look good!

In the end it’s a flop like the rest of this Administration!

Edited 2018-11-05 02:34 UTC

Reply Score: 3

These corporate subsidies are ridiculous...
by A.Dev on Mon 5th Nov 2018 10:57 UTC
A.Dev
Member since:
2017-10-10

Any idiot can see you end up in a race to the bottom.

Companies, perfectly sensibly, play one against the other, do bait and switch and close the plant the minute the subsidies end, moving on to new subsidies.

Politicians are soo easy to manipulate as the other side knows exactly what will play with the electorate.

Politicians involvement is the primary problem with public ownership versus private, it's not public ownership per se.

Now the interesting thing is that as manufacturing becomes more automated - the cost of labour decreases to such an extent that it's not longer cheaper to build in China and ship.(*)

If countries want to compete in high end manufacturing then they would do better putting the money into their universities in my view.


*( The other cost advantage is free waste disposal in the form of environmental dumping - however China are waking up to the true cost of this - they can literally see it with enduring toxic smogs in their big cities ).

Reply Score: 3

TheForumTroll Member since:
2018-04-28


Now the interesting thing is that as manufacturing becomes more automated - the cost of labour decreases to such an extent that it's not longer cheaper to build in China and ship.(*)



This is nothing new. Go back in time and everything said Made in Japan instead. Unless we get *real* AI this won't change and we are nowhere near anything looking like AI.

The US only has one thing keeping it number one in some important areas and that is a big home market where a business can grow strong before it goes international. With an even bigger home market in China, Chinese companies will out-design, outperform and out-build the US no matter if it is 10 robots and 1000 people or 1000 robots and 10 people doing the job.

Shipping is unimportant. It will continue to become cheaper and products made in China are already costing more in US trucking than shipping to the US. This is why you can get a marble statue made in china cheaper than one made in the US. The only two things that matters are labor costs and price of living. The US is extremely expensive compared to what you get. You can get a much higher quality of life for your money in many places outside the US. On that front the US has lost a long time ago and it isn't improving.


There are really only 3 ways this can go:

1. Someone else takes over as the low-price manufacture when China moves to middle- and topware (it is already there). Somewhere in Africa with Chinese money most likely.

2. The US uses its military to ensure it can stay at the top by nuking China, Africa and whomever pops up as the next competitor.

3. We get a better system implemented worldwide than Capitalism.

All 3 roads leads to the fall of Rome.



*( The other cost advantage is free waste disposal in the form of environmental dumping - however China are waking up to the true cost of this - they can literally see it with enduring toxic smogs in their big cities ).


China is doing much better on that front than anyone else in history during their respective "great leap". Look at pictures from the industrial revolution in the UK or at the rust-belt in the US for example. China is also moving very fast to cleaner electricity (far outpacing the rest of the world).

Edited 2018-11-05 17:44 UTC

Reply Score: 3

A.Dev Member since:
2017-10-10

> Unless we get *real* AI this won't change and we are nowhere near anything looking like AI.

Don't see the need for AI for the vast majority of automation.

> The US is extremely expensive compared to what you get. You can get a much higher quality of life for your money in many places outside the US. On that front the US has lost a long time ago and it isn't improving.

That made me smile. Yes - if you take your US money and spend elsewhere - not if you go work elsewhere!

I work in a transatlantic company - with people doing the same job in the US and UK.

The people in US get about 50% more pay ( taking into account exchange rates ) than the UK *and* the cost of living in the US is typically less.

The US is living beyond it's means pure and simple.

However that's not the same as saying the US and elsewhere couldn't have a decent standard of living irrespective of what other countries are doing.

Bottom line - output is determined by input*capabilities. Input is relatively fixed. Working out what to do isn't hard.

Reply Score: 2

intellectually bankrupt economics
by project_2501 on Mon 5th Nov 2018 14:28 UTC
project_2501
Member since:
2006-03-20

" Trumponomics"

Reply Score: 4

Comment by Phloptical
by Phloptical on Tue 6th Nov 2018 01:18 UTC
Phloptical
Member since:
2006-10-10

Will they be spending money on the nets to catch the workers jumping out of the windows like they do in China?

Reply Score: 3

Workers shipped in from China
by Adurbe on Tue 6th Nov 2018 13:51 UTC
Adurbe
Member since:
2005-07-06

Even where the jobs Have been created, today it has been released they have been unable to fill many of them, so are relocating staff from China to fill the roles. This shouldn't come as a surprise as its a repeated pattern of Chinese foreign investment around the world.

Reply Score: 3

RE: Workers shipped in from China
by kwan_e on Wed 7th Nov 2018 13:32 UTC in reply to "Workers shipped in from China"
kwan_e Member since:
2007-02-18

today it has been released they have been unable to fill many of them, so are relocating staff from China to fill the roles.


Not unable. Unwilling. Unwilling to allow collective bargaining. Unwilling to pay what people are really worth. All because it cuts into profits that could easily cover the higher cost of employing people who can do the job.

Reply Score: 3