$3 billion in subsidies for 3,000 jobs.
http://www.jsonline.com/story/news/2017/07/26/scott-walker-h...
http://www.jsonline.com/story/news/2017/07/26/scott-walker-h...
Taxpayers are actually not funding any of this.
The money is effectively taken from wherever foxconn was gonna build this factory, like China, or Mexico.
Today if you buy an LCD monitor from Foxconn, they have to pay ~5% Wisconsin state sales tax. Under this deal, they get the rebate. So, taxpayers are paying with revenue they would otherwise have gained.
It's still a huge number though.
By comparison, economists have estimated $125K/job-year to $202K/job-year from the 2009 stimulus (ARRA). [1]
[1] https://files.stlouisfed.org/files/htdocs/publications/revie... , page 3
There were also alot of one off projects like sending people out to help with Energy Efficiency in homes.
There was not alot of long term stable jobs in there.
I disagree with this corporate subsidy, and I disagreed with the Recovery act
In FY 2015, Pentagon and related spending totaled $598 billion, about 54% of the fiscal year 2015 U.S. discretionary budget.
1. https://en.wikipedia.org/wiki/Military_budget_of_the_United_...
"$1.5 billion in state income tax credits for jobs created, up to $1.35 billion in credits for capital investment and up to $150 million in sales tax exemptions on construction materials"
This whole late stage capitalism transition is going to be painful.
What does this even mean? Sounds like an activist buzzword. What evidence do we have that there are even "stages" to capitalism much less that we are in a later stage?
Capitalism is showing its flaws if we're paying a million dollars per job just to bring the job to our soil, although I suppose it's better then just keeping Foxconn products (or products that integrate their components) out at ports (or tariff them, like Russia with phones without a GLONASS chipset).
You say "pay me 20% of your 100k job" netting you 19k, I refuse to pay that steep of a fee and counter with "take 10% or nothing" netting you 9k.
I don't believe its fair to say that you have lost 10k if you accept my terms as the alternative is receive nothing. You have increased your revenue by 9 thousand dollars as opposed to earning 0 dollars. The option you proposed is simply not on the table and can't really be considered.
It really is a choice between three outcomes. (1) No factory is built, no taxes collected. (2) Factory is built, company pays full sticker price on the taxes. (1) is unappealing because nothing is created. So we arrive at (3), where the company understandably wants to renegotiate the sticker price on the taxes and the taxing body doesn't want to end up in scenario (1), so they come to an agreement somewhere in the middle.
Why is this translated into the company received cash from the taxing entity?
They are exactly equivalent to cash payments without the special tax treatment, so, yes, they are very much the same.
Before: 0 jobs, $0 taxes (factory doesn't exist)
After: 13,000 jobs, $100M taxes (down from $300M if no tax concessions were given, as per article)
The incentives would cost the state about $200 million a year but Foxconn's payroll in Wisconsin could reach $700 million a year, Walker's office said.
Also the $3B is the cost over a decade, not in a single year.
That does not make the incentives any difference than a cash payment in exchange for building the factory.
> The incentives would cost the state about $200 million a year but Foxconn's payroll in Wisconsin could reach $700 million a year, Walker's office said
The relationship between “would” and “could” in that sentence is quite important.
Sure it does. A state writing a check for, say $100 million dollars requires spending $100 million dollars (possibly borrowing it to do so). Giving $100 million dollars in tax reductions requires spending $0. The former may not be feasible, while the latter generally is, so the two are not equivalent.
That people can fail to see this may explain why these deals are politically popular, though.
Now, if you wanted to complain about companies taking the tax break and not following through, I'd agree with that.
Let's create another scenario. We are family members. Whatever I earn, I give you half.
Scenario A: I never get a job, you end up with $0.
Scenario B: I get a job, but only if you agree to take 25%, not 50%. I take the job paying me $100 and you get $25.
It's not cash out of anyone's pocket.
Being bled less isn't the same as receiving a blood donation.
That's a complicated question in the case of generally applicable changes in tax policy, like a new tax credit available to anyone who posts on internet discussion boards.
It's a simple, straightforward “yes” when the change in tax policy only applies to me, and only for a specific action (post on HN about the Foxconn factory deal, and get $5000 of your federal income tax.)
The latter is more like a government contract (but without the competitive aspects and other controls designed to assure fairness and public value.)
The outsourcing and automation and optimizing away of blue collar American jobs was already capitalism working as intended. Somehow, Trump and the Republicans have sold middle America a bill of goods and convinced them that globalism and capitalism are opposed to one another, when they are the same.
What's happening here is very much anti-capitalist.
I think you agree with the OP?
From a capitalist point of view, blue collar jobs lost in the US to outsourcing and automation deserved to be lost. The market optimized for a better solution for consumers, and that solution was cheaper labor and automation.
A true pro-capitalist party would admit that, rather than pander to coal miners and steel workers, and would try to make the US more competitive in the modern, global marketplace rather than try to drag the entire world back into the tar pit of American industrial dominance.
A true pro-capitalist party would even embrace socialist programs like nationalized healthcare and education, if that would make it easier for displaced workers to re-educate themselves and re-enter the workplace, and compete more readily with labor throughout the world, and take the burden of healthcare off of employers. Invest in infrastructure and technology. There's probably even a capitalist argument for basic income allowing the repeal of the minimum wage.
But "write as big a check as necessary and party like it's 1949" is just pandering, it's not even a serious attempt at a solution for anything.
While not optimizing for the externality that those consumers are also the labor that's displaced thus destroying their ability to consume and thus not not a better solution for consumers after all.
The market is not magic, it fails often and it's very annoying to continually hear people brush off those failures with the no true Scottsman fallacy. If capitalism means to you only a perfect free market then it's a meaningless term because no such thing exists and more importantly that ivory tower definition is not what people are referring to when they use the word, capitalism as implemented in the real world is what they're referring to and jumping in and claiming "that's not capitalism" adds nothing to the conversation.
So yes, that is capitalism, because this kind of thing is exactly what capitalists do: they curry for favors from government to get into protected positions to avoid competition. Capitalism is what capitalists do, and this is exactly the shit they do. Crony capitalism is still capitalism.
FTFY. The problem you describe is a human problem that will happen in any system, capitalist, socialist or mix of the two. Power corrupts, absolute power corrupts absolutely. Capitalism simply provides power in a normal distribution proportional to wealth. Socialism provides power in a power law distribution and the head of that distributions constitutes absolute power.
Some would argue that this is exactly the point of the phrase.
Undue influence of individuals with power (via money or other mechanisms) is hardly unique to capitalist systems. Every socialist country has had the exact same problems with corruption and misuse of power. It's also pretty trivial to argue that such corruptions and abuses are far far more toxic under socialism because there is no "pressure relief valve" in the form of competition. Socialism is predicated on a monopsony, and over time a market with a monopsony will likely result in monopolies on the sell side. You eventually end up with no alternative to the corrupt choices.
"Late stage capitalism" is a political term that was likely created by someone that considers themselves a temporarily embarrassed bolshevik central planner.
The one criticism of that article I do have as far as what people he perceives as "Marxists" think (and I'm not one, though I do think that the general shape of what Marx describes, as opposed to either Marx's end-state conclusions or Marxists-the-fear-object group might believe) is that social democracy, which I will helpfully point out is not "Marxism", has also fairly obviously demonstrated its bones over the last decade-plus, after the article's writing, as that late-capitalistic model has created additional, shitty stresses on populations. Free market uber alles has catastrophically failed in every nontrivial employment, and while heavily-planned or fully-planned economies have obvious problems, social democracies the world over have this tendency to mostly work. I won't call them a global maximum, because that's impossible, but they have a decent claim to a local one.
Anyway, let's be real: this isn't a "basic primer" and it doesn't contain the argument you thought it did after you googled "Marxism critique". You don't have to like the way things are going, but if you're gonna pretend to an opinion, maybe give it an honest go before you offer it?
Could you give any examples of phrases that exist but weren't made up?
Uh, the fact that history exists, and that within the set of historic systems which follow the basic system of property rights distinguishing capitalism [0], there's a clear sequence of different specific systems in history.
> much less that we are in a later stage?
The same is also evidence that the current stage is later than the previous ones, those it is admittedly speculative (until capitalism is displaced) that it is the latest stage.
[0] There's some debate over whether the mixed economy that is currently dominant in the developed world is properly a “stage” of capitalism (the system dominant in the 19th century and first labelled “capitalism” by it's critics) and not a successor system with some common features, but we can leave that debate aside for now.
At the risk of being a bit pedantic, limits don't imply stability, though, only that something is heading in a certain direction, and may or may not be reached.
The phrase "late stage capitalism" is one I've seen crop up only in the last year or so, and mostly in the context of the subreddit of the same name.
Can you recommend some reading outside of that subreddit? I find the subreddit's content narrowminded to the point that I thought it was satire at first, but I'm open to the topic in general. Especially interested in what makes these (supposedly undesirable) aspects of capitalism "late stage" rather than just "fully realized". What I mean by that is much of what people complain about under the title "late stage capitalism" is just "regular capitalism less mired by things that aren't capitalism".
edit: also unhelpful is that the wiki describes it as a marxist idea representing an era from the 40s onward, while it's typically discussed in terms of changes that have occurred relative to times like the late 60s/reagan-era/post-ww2 era that are themselves technically "late stage capitalism"
The Economics Of Inequality: https://www.amazon.com/gp/aw/d/B013HZ8U0G/
Debt: The First 5000 Years: https://www.amazon.com/gp/aw/d/B00Q1HZMCW/
Boomerang: Travels in the New Third World: https://www.amazon.com/gp/aw/d/B005CRQ2OE/
The Global Minotaur: America, the True Origins of the Financial Crisis and the Future of the World Economy: https://www.amazon.com/gp/aw/d/B010VKP0CQ/
I'm mobile at the moment, but will noodle on further books that I'd consider contributors to the "late stage capitalism" school of thought (IMHO, as an amateur macroeconomic scholar). I am also open to rebuttals!
I haven't read it since undergrad, but he broke up the stages of capitalism in three parts, with the earliest being a free market capitalism up until the mid 19th century, then monopoly capitalism up until around WWII, and late capitalism following that era. It is dominated by a pervasive industrialization that is fairly unrestrained by national borders and a global culture centered around mass consumerism.
American society places a lot of value on having a job, so it is important for people to have one to help maintain self worth.
If you automate yourself of a job, are you worthless now? Of course not! But we're still stuck with these silly societal moores that work and a job equate to value. No longer!
I worry a step change will fail badly.
What happens is that the jobs up and move as soon as the subsidy ends.
There has been quite a bit of research done on these kinds of tax subsidies and they almost always cost more than doing nothing and not getting the jobs.
Its a fictional difference that is used to make it seem more palatable.
Governments don't have a great track record of picking winners, and companies that are capable of stealing headlines don't necessarily have a bigger or better impact than thousands of unknown businesses.