Foxconn’s buildings in Wisconsin are still empty, one year later
theverge.com
theverge.com
Sometimes you have to have the self-awareness to ask yourself, here I am, a country-simple and inexperienced elected official, who's being presented with a huge fantasy of a deal (well beyond my order of magnitude experience), and being asked to keep this secret from the press and constituents.
Is it likely that I'm such a good negotiator and master of finances and state incentives and my town is so special, that the huge company I'm dealing with (with dozens of analysts) is asking me to keep it secret because they're afraid of how they're getting screwed? Or maybe the other way around?
Those town council members and mayor got taken for the ride of their lives by their gullibility and desire for national politicians to chalk up a headline, which of course, never materialized.
Edit: oh, I see someone has just posted the Reply- all podcast link to that story, thanks!
No one thinks of themselves as "country-simple". They certainly don't throw hope for their community out the window because they're too "country-simple" to understand that it's a lie.
Sometimes you have to have the self-awareness to ask yourself, here I am, an educated tech enthusiast, who's being presented with a decision and self-delusion I can't empathize with. Is it likely that my narrow experience can be applied in judgment of all other people? Or maybe I have never known the desperation of living in a dying region?
I'll bite.
The first thing I would do in a desperate situation in a position of power in a dying region is be radically open to feedback and transparent with my own ideas.
A desperate situation is no room for ego or selfishness.
You involve the community, and you try to listen to everyone, and if an opportunity presents itself that is above your paygrade you try to hope that the COLLECTIVE wisdom of multiple people with different strengths might somehow help offset your power imbalance.
Now, listen to the podcast that interviews this inexperienced elected official and ask yourself if he did anything of the sort, or if he just saw an opportunity to enrich and embiggen himself: https://gimletmedia.com/shows/reply-all/wbhjwd
I'm glad that people like you exist, but it is extremely rare that they are elected or stay in office.
It's common for intellectual humility to be perceived as incompetence or weak leadership. "I don't know what to do, but I'm open to hearing your ideas!" is not confidence-inspiring. Admitting to mistakes can be the same.
> You involve the community, and you try to listen to everyone
Similar to the above, this can be seen as weakness. Look at the criticism of Jack Dorsey and Twitter. People mock him for this behavior instead of making unilateral decisions with incomplete evidence.
> if an opportunity presents itself that is above your paygrade
Again, not something a normal human in a leadership position often thinks. You don't think to yourself, "Wow, I'm just not smart enough to understand a large company promising something." Especially in the US, where people trust the legal system to force the other party to make good on its promises.
> he just saw an opportunity to enrich and embiggen himself
I agree that he did this. He wasn't the only person who saw this opportunity. It's also how democracy is supposed to work: someone wins a popularity contest and then wants to win it again.
The incentives this creates are sometimes perverse. You do stupid things that sound good just because they sound good. Can you imagine being an official brave enough to say they don't think Foxconn would follow through? No one would want to vote for you.
We've seen this repeatedly with Trump: he promises impossible things like the return of the coal industry and manufacturing jobs. Some of his rivals in the Republican Party did not promise this, and they were nowhere near as popular as him.
I think this is a failing of our constantly-broadcasting news cycle and incorrect belief about what leaders should be. Yes, leaders should help their people be confident. But we also need to stop putting expectations on leaders that they know the answer at every minute or communication. Otherwise we incentivize them to put out incorrect information or decisions for fear of being seen as weak.
I also have a feeling that our instant "like" culture, mass mobilization of (generally uninformed) public opinion, and belief that democracy to the lowest level is not the right way to manage situations that require contemplative expertise and specialized knowledge.
Of course not. But this is a story of a small town government negotiating with a multibillion-dollar company. They kept negotiations secret. They didn’t seem to hire best-in-class bankers nor lawyers.
I understand the desperation. But stupid doesn’t become less stupid because it was dumb for the right reasons. Best case, they deluded themselves into believing they found a golden goose. That’s incompetent.
I think you misunderstood my post.
I wasn't saying that what they did wasn't stupid. It was. The post I was replying to implied the following in a condescending way:
1) the poster is not "simple" enough to be conned by a massive corporation
2) all people living in rural areas are "simple"
3) all people living in rural areas should know that they are simple and never aspire to anything that we big-city people do because it is beyond their cognitive abilities
4) doing something that will probably fail (trusting Foxconn, in this case) is never a rational decision
Regarding #4, it's easy to say that Foxconn is 100% untrustworthy, but we all know that mostly in hindsight. Even if they had a 1% chance of coming through, a region with a dying economy might actually be rational to throw away an enormous amount of money. If it's their only hope, it would be rational to throw away all of their money.
Countermeasures to this stereotype can be equally damaging. It may have played into Foxconn’s advantage here.
“We don’t need an expensive coastal banker telling us what to do” is reasonable if everyone is out to screw small timers.
> a region with a dying economy might actually be rational to throw away an enormous amount of money
This wasn’t money they had. It was taxpayers’ future money. Money that could have financed education or infrastructure or a move to another city. This mindset is only rational if staying in place has infinite utility, not only for the region’s present residents, but its future ones too.
* Mount Pleasant WI is not rural (city-data.com says 95% urban). It lies on I94 just 1hr 15min from Chicago and 30min from Milwaukee. * I doubt Mount Pleasant WI is dying.
If I remember, the deal was pretty opaque and many details were murky. I find it more likely the local officials were incentivized somehow as opposed to sheer incompetence.
Additionally, it should be noted that the WI governor (Scott Walker) who orchestrated this deal lost his re-election bid shortly after this. While there was always uncertainty about Foxconn actually following through, the lack of Walker (and thus probably Trump) basically sealed the deal.
I think you're right. I was responding to someone saying they are "country" people.
> I doubt Mount Pleasant WI is dying.
Milwaukee's metro area (which includes Mount Pleasant and Racine, the places most closely tied to Foxconn's scam) has seen a massive decline in manufacturing:
> "The Great Recession hit Milwaukee’s manufacturing industry especially hard, and the city continues to have discomfiting employment statistics..."[1].
Broad economic numbers aren't great for Racine County as far as I can tell. They're worse than the US overall. Even if they were great, we know from examples across the US that declining blue-collar jobs may be especially painful for the non-urban electorate -- people who influence the local officials who believe the wishful nonsense Foxconn peddles.
> "'This area desperately needs the investment. There's nothing here anymore,' said Tom Johnston, a 54-year-old veteran of [Racine's] once-vaunted manufacturing sector."[2]
1. https://www.badgerinstitute.org/Reports/2013/A-Fresh-Take-on...
2. https://www.washingtonpost.com/national/as-the-economy-teete...
It's basically in the same metro area as Chicago. Would you say Chicago's dying? It may have declined (or not grown as fast as other US cities) lately but "dying" seems like hyperbole, no?
Even if they had, is it likely that those people would have told them it wasn't a good deal? My sense is that everyone on the inside thought this was a sweetheart of a deal and were already counting their eggs. And if recent history is any guide, that group of people might very well be the least concerned about whether truth was being conveyed, or care to look deeper into the matter than their own pocketbooks.
Though the smaller towns in the state are more dependant on lower yield industries.
I remember Brazil built huge stadiums for the World Cup and Olympics banking on their local teams moving into them, which wound up not happening because the teams didn’t like the lease terms. A $900M stadium became a bus garage[1]
0: https://www.theguardian.com/sport/gallery/2014/aug/13/abando...
1: https://www.popularmechanics.com/adventure/sports/a15531/bra...
I mean, they actually hold an Olympics. It's not clear to me that anything meaningful will happen out in Mt Pleasant Wi. Not even anything worth the 1 billion we've already spent, and that's forgetting about what we're on the hook for if something does happen. It's put a lot of us in wisconsin in the awkward position of hoping everything there completely fails, so we can get out with just the losses we've already taken.
A year after the $51 billion Winter Olympics, many of the key facilities built for Vladimir Putin's extravaganza have been barely been used.
While the pistes up the mountains are now often packed with skiers - the collapsing rouble means Russians have switched from the likes of Courchevel to the Caucasus - many of the key sites of the games appear to have little prospect of being filled again.
He complained that the Bolshoy Ice Dome - costing the Russian taxpayer £197 million - requires a budget of £9,900 a day to maintain, 'mainly for taking care of the ice'.
A company which owns some of the key facilities - hardly used since the games - and is close to the regional authorities, is on the very edge of bankruptcy, he reported, citing Russia's leading business newspaper Kommersant.
https://www.dailymail.co.uk/news/article-2941216/Extraordina...
Sochi went from being a dump to being a somewhat popular vacation destination for middle class people.
There's room for argument on whether federal funds should have been used to make Sochi richer and nicer, but the article as written is basically fake news.
Or quite literally any banker or lawyer who has negotiated such deals before.
The person on the company’s side has done this dozens of times. The person negotiating for the city has not. At some point, that asymmetry should become apparent.
I wouldn’t pay a cent. Foxconn isn’t delivering on its promise. Put the money towards something that will matter. UW funding cuts should be reversed. Build some infrastructure (e.g. fiber, bike trails, high speed rail, solar and wind) and get Wisconsin moving forward.
For example, the fire chief ran an anonymous blog commenting on city council happenings (exposed years later when his WordPress install errored and exposed his username). For years he anonymously accused a citizen who opposed the Foxconn project of sleeping with opposition friendly city council members, and then variously:
mentally ill, hypocrite, dingbat, loser, village bully, liar, vile, a joke, an embarrassment, illiterate, a dope, a pimp, deceitful, evil, smelly, hateful, revengeful, crazy, nut job, embarrassing, profane, psycho, stupid, lowlife, vengeful, immoral, racist, witch, snake lady, freakshow, bitter, dumb, and much, much more
If you truly believe what you're doing is good for your community, you don't typically shroud the entire process in secrecy, suppress dissent, and only make a public announcement once the deal is practically set in stone.
#132 Negative Mount Pleasant DECEMBER 6, 2018 A small town in Wisconsin becomes the site of a completely unprecedented experiment. https://gimletmedia.com/shows/reply-all/wbhjwd
It left me at the end of the episode thinking, foxconn came in like a fox and conned everyone involved.
https://en.wikipedia.org/wiki/The_Twelve_Chairs_(1970_film)
But reading the wikipedia description of the book, it's the same premise: characters attempting to obtain jewelry hidden in a chair.
https://en.wikipedia.org/wiki/The_Twelve_Chairs
Are you thinking of a different story?
Edit: ah, apparently that's a part of the novel, which if it's in the Mel Brooks film, I don't recall: "bamboozling a village chess club with promises of an international tournament."
Is also the plot of the infamous eponymous Gaslight.
states are the canonical units of governance in the US. towns/cities have no budget or power on their own. that's all delegated from the state, analogous to allowing VP's access to their company's credit line. since it's (literally) a ward of the state, the responsibility for debts also fall on the state in cases of insolvency of the municipality.
note that state and local muni bonds are the same thing--borrowing against a state's future tax earnings (often at great cost).
It is unbelievable how dumb and corrupt some local governments are. Especially disturbing how heartless these people can be to their own town folk.
This is like some 3rd world country local government kind of banana republic. Unbelievable.
It is partly caused by the (1) extreme levels of devolution; (2) politicisation of every level of public life (eg., even judges are elected); (3) barriers to removal of elected people from office.
Kind of a perfect storm: elect everything, make being directly elected sacred, and nearly impossible to undo.
In the UK almost everything is appointed, including the prime minister who is not directly elected to the office. The PM is then quite often removed from office, along with the whole class of unelected civil servants whose entire careers are spent working for the government regardless of who is in office.
The huge levels of institutional professionalisation this allows basically makes corruption nearly impossible.
A major issue in corruption research is this "perception" point -- this method relativizes the definition, at best, and largely renders it useless.
The issue here is that Americans mostly think of corruption in terms of bribes, etc. rather than the "abuse of public trust".
eg., a judge decides to appoint a guardian with a conflict of interest to manage the estate of a elder person -- is that judge corrupt?
In the UK most people would say, "yes". In the US, "no". That while his action may not be the best / moral / right, etc. it's not seen as an abuse of the office -- he has the power to decide and therefore his decision isn't corrupt.
I think this view comes from the written-constitution approach to defining the powers of offices. In the UK many powers are held by convention and only under the assumption that they are being used justly -- an extra legal criterion.
It's very hard to measure corruption due to these issues. Personally I'd say most senior office holders appointed by trump are corrupt -- from the EPA to the FCC, to the consumer protection bureau. I think many people in the UK would agree: these appointees deliberately undermine the operation of these agencies -- and are therefore abusing the public trust.
(some) Americans however would see frustrating good government as a valid way to govern.
Under this "public trust" definition, corruption in america is routine and common place. From Sheriffs, to the police, to municipal and national executives. The trust placed in the office to execute it on behalf of the people is routinely abused.
Distinguish here: congress deciding not to have a CPB (, EPA, etc.) with an executive appointment to execute the mission of the CPB on behalf of the public.
To frustrate the latter is corruption.
By the way, anyone looking for a little fun follow up, a WordPress crash outed the owner of the A Better Mount Pleasant blog: https://www.wpr.org/sites/default/files/pfc_complaint_-_robe...
* Mount Pleasant is not some backwards county where people are "country-simple" (?), most people live in urban/sububurban areas with farmland quickly being eaten up for new construction. Milwaukee is 30 minutes away. Chicago is just over an hour.
* The economy of Mount Pleasant is not dying. Where you got that from is beyound me.
https://archive.jsonline.com/news/statepolitics/democratic-r...
What can I say? Wisconsin is crazy bad. But it's home for me.
Republicans have discovered how to "hack" democracy. I think it's pretty clear both sides have engaged in some pretty egregious gerrymandering in different parts of the country, but only Republicans have become so hostile to allowing people to actually vote. And while both parties' positions on voter laws may be due to self-interest (marginal voters are more likely to vote Democratic, so barriers to voting are more likely to negatively affect Democrats) it doesn't really matter - the Republican position of things like shortening early voting, closing tons of polling places in spots like university towns, forcing a vote during a pandemic is bad for democracy.
The Supreme Court ruled against the plaintiffs (not surprisingly, 5-4 I might add), but in the grounds that the federal courts didn't have the power to intervene in cases of political gerrymandering, but no one really debated that the Wisconsin maps heavily favored Republicans over what a more normal, compact map would produce.
Wisconsin is just corrupt. You wouldn't believe the geometric gymnastics they jump through to try to get districts that will always vote liberal or conservative. Districting maps look like something from mc escher.
Never really thought about all that until you mentioned it. When you grow up in it you don't really see it unless someone points it out to you.
The Revolutions Podcast also introduced me to the history of the Forty-Eighters, who had a tremendous impact on the politics of the Upper Midwest. Particularly in Wisconsin. And that's on top of a substrate of communitarian values brought by the original European settlers pushed westward from Massachusetts.
It's really a post-millennial phenomenon that the politics are now dominated by a pan-US urban-rural divide.
https://en.m.wikipedia.org/wiki/Forty-Eighters
https://www.chronicle.com/article/The-11-Rival-Regional-Cult...
There was no need for the police to frame him. He was a known lifelong criminal and the running joke with LE was that he will get arrested again because he is that stupid.
I'm not saying the documentary was completely without bias in his favor, but there were inconsistencies that would give the most casual observer pause.
I'm hard pressed to think of a worse place to put a data centre than under a glass dome. The moon, perhaps?
For thermal reasons alone, computing is a massive challenge in space.
Even liquid cooling setups on earth eventually blow their heat into the atmosphere as the primary means of keeping the liquid cool.
https://en.wikipedia.org/wiki/Seasonal_thermal_energy_storag...
Not necessarily in that order.
Also, Brat Stop is right there... for better or worse.
To your point tho', Uline, Amazon, et.al. know the entire geographic location hits a major distribution sweet spot. There are many built-in advantages other than those offered by state and local government.
Plus, many residents living between Milwaukee and the Illinois state line remember the huge impact American Motors had on family, friends, and neighbors. AMC, then Chrysler, workers had stand-on-your-feet jobs with good pay, good benefits, and good retirement.
It was not an insignificant event when that plant closed 32 years ago.
Every city council from Kenosha to Milwaukee knows the meaning of 13,000 manufacturing jobs firsthand.
Factory work should be safe and no more than 8 hours as well established, maybe even less so there can be more jobs.
If anything Chinese style management of production needs to care for workers more, even if products cost more.
Innovations can be made other ways than making people into slaves that never see their family, live a life and have a quality of life at work and time away.
Happier people are more productive workers and need less time to produce the same as crunched, overworked workers. Everyone in game development or engineering knows this. Just pressing the gas does not lead to the best results, an ebb and flow and research and development of mentally prepared, rested workers is key.
Its always odd to me when subsidies are advertised as a cost, i.e. lost tax revenue. That would mean not having Foxconn come to Wisconsin at all is also a cost, i.e. lost tax revenue. And that Foxconn also cost adjacent states a ton by not moving to them either. That seems odd to phrase it that way. Subsidies are not a cost.
When I buy something at Target for 50% off, did I just cost them money? Doubtful. They're still making money. And its in Wisconsin's interest to make some money, rather than nothing.
The contract[1] states that these are tax credits pursuant to Wisconsin State statute 71.28(3wm)[2], which states "If the allowable amount of the claim under this subsection exceeds the taxes otherwise due on the claimant's income under s. 71.23, the amount of the claim that is not used to offset those taxes shall be certified by the department of revenue to the department of administration for payment by check, share draft, or other draft[...]"
So if Foxconn meets the investment and job creation requirements and doesn't have significant state tax burdens, the Wisconsin tax payers will have to write big fat checks to Foxconn, hoping that the indirect economic impact of Foxconn's activity is enough to offset these payments. In that case, these subsidies are a direct cost.
[1] https://wisconnvalley.wi.gov/Documents/WEDCcontract-state.pd... [2] https://docs.legis.wisconsin.gov/statutes/statutes/71/IV/28
Foxconn does employee software folks at the milwaukee "innovation center." Doing what, not sure.
> In 2018, the Walker administration shifted up to $90 million in local road funding to road work related to the Foxconn factory.
I'm much more in favor of using these types of data points to determine cost, rather than the subsidy "cost".
Pretty messed up.
The actual New London development fell through anyway and the area is just vacant. A large Pfizer presence nearby was a major reason behind the plan in the first place; in the wake of mergers and with the tax breaks that lured them there in the first place expiring, Pfizer pulled up stakes.
They just declared all the farms to be "blighted", and then took them. It was pretty messed up.
If true (which I bet it is - that's how I'd structure a deal like that), this would mean those country folks in Wisconsin are not as stupid as liberal media wants you to believe.
with smaller governments, ppl will focus their corruption on more lucrative organizations.
And hopefully free market capitalism in such a system would be a check on the corruption.
Why should Americans cares how there tax dollars are spent, right?
Have they been met? Has it been a net negative from the taxpayers' standpoint?
1. Foxconn claims that the targets have been met, but the empty buildings obviously make some petiole suspicious.
2. There was also a lot of subsidies and government spending based on the deal that is not tied to the targets. This was mostly at the local level (which __really__ can not afford it without the project going as expected) but the state had some too