Foxconn Still a Con

From the start it was clear to anyone who knew Foxconn’s record that former Gov. Scott Walker’s $4 billion taxpayer give away to the company was, well, a con.

Now, after four years of broken promises, false starts and a lot of just plain bizarreness, Gov. Tony Evers’ administration has crafted a much more sensible deal with the company. Don’t hold your breath that much of it will actually come to fruition, but Evers’ agreement would scale Foxconn’s subsidy all the way down to $80 million if it creates 1,400 jobs. It’s estimated that the company would get about $55,000 per job. That’s still too much.

Per Job Subsidy For Foxconn
Walker’s Deal$230,000
Evers’ Deal$55,000

First the company promised to build big flat screens and employ 13,000. Then it was going to build smaller screens. Then it was fish farming, exporting ice cream, storing boats. Now it’s dangling electric vehicles out there. It has not proposed a CBD oil factory yet, but it’s early in the day.

The company promised “innovation centers” all over the state. These are now just empty, decaying buildings. It promised $100 million to the UW. It has delivered on less than 1% of that pledge.

You get the picture. Late last year, the Verge wrote a scathing, comprehensive investigative piece on the whole mess. Read it and weep.

The state and local governments have already sunk $200 million into the Foxconn boondoggle. Much of that is just wasted now, although some of the infrastructure improvements, while probably overbuilt, will last for decades and be of some value.

The broader lesson is that the state should get out of the incentive business altogether. During his campaign, Evers promised to get rid of the Wisconsin Economic Development Corporation, then changed his mind once he got into office. He was right the first time.

A just-released state audit shows that WEDC is still a disaster, though Evers’ administration has made some improvements. The agency still has $6.6 million in past due loans. That’s down from $7.6 million, but only because the agency has written off or deferred payments. Since the quasi-public entity was created by Walker in 2011, only 20,000 of the 37,000 jobs promised by companies that got state money have been created. And, of course, it would be difficult to be sure that even those jobs wouldn’t have happened anyway without the state handout.

The evidence is that these specific job subsidies just don’t work. What works is investing in infrastructure, education and the environment and paying attention to quality of life issues that attract skilled workers. And yet, according to a recent study reported on by Bloomberg News, local governments often pay for their subsidies by cutting public education — the very thing that leads to powerful, long-term real economic development.

The trouble comes when we think of economic development as targeted corporate welfare rather than the basic stuff any efficient government should do for its citizens. Walker’s Foxconn deal was just a gross example of wrong thinking. The new deal is a scaled down version of the same fundamentally flawed and wasteful approach.

Tony Evers has taken Walker’s monumentally bad deal and made it just bad. That’s what counts for progress in the corporate welfare game.


Published by dave cieslewicz

Madison/Upper Peninsula based writer. Mayor of Madison, WI from 2003 to 2011.

One thought on “Foxconn Still a Con

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: