9 ms·
$3 billion in subsidies for 3,000 jobs. http://www.jsonline.com/story/news/2017/07/26/scott-walker-heads-d-c-trump-prepares-wisconsin-foxconn-announcement/5120
by ty_a 9y ago
$3 billion in subsidies for 3,000 jobs.
http://www.jsonline.com/story/news/2017/07/26/scott-walker-heads-d-c-trump-prepares-wisconsin-foxconn-announcement/512077001/ http://www.jsonline.com/story/news/2017/07/26/scott-walker-h...
- kingnothing 9y ago$1,000,000 per job seems like a staggering subsidy.
- toomuchtodo 9y agoSeems like it'd be cheaper to just give it away as UBI, no? Especially considering a million dollars for a transient job versus paying someone a million dollars over their lifetime. This whole late stage capitalism transition is going to be painful.
- malandrew 9y ago> "late stage capitalism" 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?
- toomuchtodo 9y agohttps://en.m.wikipedia.org/wiki/Late_capitalism https://en.m.wikipedia.org/wiki/Late_capitalism 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).
- jjawssd 9y agoTax incentives are not the same as cash payments
- toomuchtodo 9y agoForgoing revenue is the same as forgoing a payment.
- xrange 9y agoIs there a way to find out how much Foxconn pays in U.S. taxes right now? Or how much revenue they earn in the U.S.? If Apple has Foxconn make phones in Taiwan, and Apple then ships phones to the U.S., then Foxconn doesn't pay any taxes to the U.S. on those transactions, right? Only Apple would right? If Foxconn doesn't pay any tax to the U.S. right now (???), and they build a factory in the U.S. and don't pay any taxes in the future, then it is a wash (except for now the U.S. employees would be paying income tax, etc.). Or am I missing a piece of the puzzle? (As in, maybe Foxconn is currently paying a lot in U.S. taxes from whatever operations they have in the U.S. currently?)
- handsomechad 9y agoi assume theyre talking about payroll tax
- KekDemaga 9y agoLet's say you want to take a portion of my income in exchange for career services that has a cost of 1,000 dollars a year for you to provide. 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.
- eej71 9y agoI think you are offering up a false alternative. 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?
- krrrh 9y agoCorporate welfare has existed in every "stage" of capitalism, and the justifications suit the political moods of the day (jobs for one polity, greentech for another). This isn't anything new, and capitalism would be better off without it.
- krapp 9y agoThat's not capitalism. 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.
- dcousens 9y agoTherefore, you could consider the "need" for this to happen in the first place, a "late-stage" flaw of capitalism. I think you agree with the OP?
- pjschlic 9y agoI think he is saying that this is not capitalism. The existence of bailouts and government programs to direct the markets is not capitalism's 'need' for those programs, despite any politician's attempt to sell that idea.
- krapp 9y agoI kind of halfway agree with the OP, I just wouldn't consider it a flaw of capitalism. 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.
- weberc2 9y agoIt's a million dollars for 4-5 jobs, for whatever that's worth.
- JeffL 9y agoMany would argue that job subsidies like this are the opposite of capitalism. Under a free market, the government wouldn't be subsidizing anything.
- darpa_escapee 9y ago> Many would argue that job subsidies like this are the opposite of capitalism. Under a free market, the government wouldn't be subsidizing anything. Some would argue that this is exactly the point of the phrase.
- malandrew 9y agoSo it's not capitalism at all. It's something else. 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.
- darpa_escapee 9y agoCapitalism existing under a state that will subsidize the needs of capital is still capitalism. There never was a period where 'pure capitalism' existed, so it's a bit disingenuous to claim that the system we have isn't capitalism.
- rfrank 9y agoIt's a made up phrase that's being aggressively astroturfed on misc. parts of the net. reddit.com/r/latestagecapitalism
- Nition 9y agoEvery term is made up at some point but "late capitalism" itself isn't a new term[1]. [1] https://en.wikipedia.org/wiki/Late_capitalism https://en.wikipedia.org/wiki/Late_capitalism
- rfrank 9y agoIt's not an idea that's worth taking seriously, like everything else from Marx.
- eropple 9y agoI'm dying to hear you expound on exactly what Marx actually says and why what he says shouldn't be taken seriously. Cites and quotes while you're at it, please. (No third parties, please--he clearly doesn't need the help.)
- rfrank 9y agoA basic primer is linked below for you. I'm sure you'll have wonderful, super duper insightful, and super smart commentary on it. Looking forward to it! http://www2.ucsc.edu/whorulesamerica/theory/marxism.html http://www2.ucsc.edu/whorulesamerica/theory/marxism.html
- eropple 9y agoHave you read that piece? Because I have read it before, and Domhoff writes with regards to Marxists rather than Marx. If you're going to slag Marx for what Leninists and their derivatives have decided to read into it--well, that's a pretty curious thing to do. Not uncommon, because frankly most people haven't actually read Marx and are unqualified to opine, but I know for a fact that Domhoff has, which makes this...well, like I said--curious. 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?
- dragonwriter 9y ago> What evidence do we have that there are even "stages" to capitalism 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.
- weberc2 9y agoSeems like a repackaging of the arguments against socialism. Arguments which are ridiculed here on HN "Just because most socialist states collapse into hotbeds of corruption doesn't mean it will happen here!"
- eldavido 9y agoThis is from Marx, who wrote The Communist Manifesto, among other things. I won't try to summarize, other than to say Marx treats this ("late capitalism") as a developed state of capitalism, sort of a mathematical limit/end state, where certain things are taken to be inevitable.
- deleted 9y ago[deleted]
- mediocrejoker 9y agoWhile I understand that the use of the term 'mathematical limit' is meant to imply a stable equilibrium, in this context it does make it sound as if there are rigorous mathematical proofs that these unmentioned things are indeed inevitable. I'm not sure if that's what you meant to convey.
- eldavido 9y agoI think a better choice of word might have been "asymptote". Thanks for pointing this out. 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.
- RickS 9y ago>This whole late stage capitalism transition is going to be painful. 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"
- toomuchtodo 9y agoCapital In The Twenty First Century: https://www.amazon.com/gp/aw/d/B00I2WNYJW/ https://www.amazon.com/gp/aw/d/B00I2WNYJW/ The Economics Of Inequality: https://www.amazon.com/gp/aw/d/B013HZ8U0G/ https://www.amazon.com/gp/aw/d/B013HZ8U0G/ Debt: The First 5000 Years: https://www.amazon.com/gp/aw/d/B00Q1HZMCW/ https://www.amazon.com/gp/aw/d/B00Q1HZMCW/ Boomerang: Travels in the New Third World: https://www.amazon.com/gp/aw/d/B005CRQ2OE/ 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/ 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!
- mtalantikite 9y agoLate Capitalism by Ernest Mandel: https://www.versobooks.com/books/612-late-capitalism https://www.versobooks.com/books/612-late-capitalism 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.
- cmahler7 9y ago>This whole late stage capitalism transition is going to be painful. Still preferable to the cannibalism and human rights abuse currently occurring due to late stage socialism in Venezuela.
- toomuchtodo 9y agoScandinavian quality of life is very nice, better than the US, and is socialistic in nature. Socialism can and does work.
- cmahler7 9y agoNo, Scandinavian countries are capitalist and in fact more economically free than the US. They have little or no nationalization of industry. The Scandinavian socialism meme needs to die.
- int_19h 9y agoMuch as it irks me to say so, I'm afraid this ship has sailed, at least in American English. For more than half a century, conservatives have been trying to conflate welfare state, and generally any form of wealth redistribution, with socialism. They have succeeded spectacularly, though perhaps not in ways they anticipated, as seen by how broadly popular such redefined "socialism" is among millennials - and how much easier that, in turn, makes it to sell the real thing.
- twakefield 9y agoSetting the specific numbers aside, I think providing subsidized jobs is generally a better idea than UBI. 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.
- toomuchtodo 9y agoI both respectfully and vigorously disagree. It's time we break down this sham that you require a job to have 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!
- twakefield 9y agoI don't disagree with you but I think we need to be cognizant of the best way to transition away from the current value system. I worry a step change will fail badly.
- grizzles 9y agoWhat a deal maker. Trump says he doesn't want anyone laughing at the US anymore, but if I was Foxconn I'd be laughing my head off if I got the White House to endorse this deal.
- cmahler7 9y agoThis is pretty standard for deals like this, Nevada gave Tesla 1.3 billion for the Gigafactory. This "could" draw 3 billion. It's just tax incentives, not like it's a cash payment. But anything to make Trump look bad I guess.
- krrrh 9y agoThere is essentially no difference between giving a company money and not collecting money from them that they would otherwise pay. Economists call these sorts of things tax expenditures. It amounts to taking money from some people and companies who pay their full tax bill, and giving it to others who don't.
- stvnoerst03n 9y agoMost of the "incentive" situations are not a choice between those two scenarios, they are a choice between having the business there and giving them an (initial) tax break, or having the business go elsewhere. It's a choice between collecting discounted taxes, or none at all, not discounted vs. non-discounted.
- bsder 9y agoExcept that it doesn't work like that. 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.
- dilemma 9y agoSo you claim that in five years Tesla will abandon their Nevada Gigafactory and build a new one in another state. Doesn't check out.
- mikeash 9y agoIt's a typical prisoners' dilemma failure. The states ought to band together and pledge not to give out these tax breaks. Since they're all deciding independently, the incentive to defect and offer a tax break is high.
- dshields1 9y agoThe subsidy is $1.5B for 13,000 jobs. The other half of the subsidy is for capital investment and construction expenses. It's still a huge number though.
- bbayles 9y agoThe article states that: "At $3 billion for 13,000 jobs, the Wisconsin deal would cost $231,000 per job." 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/review/2014/q2/dupor.pdf https://files.stlouisfed.org/files/htdocs/publications/revie... , page 3
- weberc2 9y agoI'm confused about the comparison between cost per job and cost per job year. Presumably this (the Wisconsin deal) would be the better deal as the jobs presumably last more than one year?
- syshum 9y agoDoubtful alot of the Recovery Act was for One Time Construction projects, like paving a road. 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.
- wavefunction 9y agoWhat about all the Wall Streeters bailed out? Those are long-term stable jobs, after a fashion.
- weberc2 9y agoYour first sentence suggests that you disagreed with my previous post, but your rationale very much supports my point. Spending 125-250K on a job that only exists for a year is markedly worse than paying a comparable amount for a job that lasts many years.
- maxxxxx 9y agoAt this price is Foxconn actually investing anything or is it all taxpayer financed?
- eej71 9y agoI think it's a mistake to describe it as taxpayer financed. The text I see in the article is all about a reduced tax bill. "$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"
- monocasa 9y agoThat's six of one, a half dozen of another given that tax rebates are a thing.
- eej71 9y agoI wouldn't call it a rebate because that implies the full sticker tax bill and expected payment was already belonging to the taxing authority. You can't be rebated something back to you when it was yours to begin with.
- bogomipz 9y agoYour link says 13,000. But even at that it's ~ 230K per job created.
- analyst74 9y agoKeep in mind that it's tax rebate, so Wisconsin is not getting any of that if they didn't lure foxconn to them in the first place. 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.
- grizzles 9y ago> Taxpayers are actually not funding any of this. 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.
- simplify 9y agoI see a lot of people focusing just on the 3k jobs, but isn't building the multi-billion dollar plant going to inject some good money and jobs into the economy as well?
- dingdongding 9y agoYeah that's why article says it is gonna generate 22000 indirect jobs.
- TheSpiceIsLife 9y agoAdditionally, there must be worse things to blow three big ones on. 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_States https://en.wikipedia.org/wiki/Military_budget_of_the_United_...