Unequal treaty

15 October 2017.  “Wisconsin enters into an unequal treaty with Foxconn.”  That’s the title of an incisive column by Prof. Chris Erickson of New Mexico State University in the Las Cruces Bulletin of today’s date.  In brief, Wisconsin governor Scott Walker, controversial for many actions already, signed into law a raft of concessions for the Taiwanese company Foxconn to make flat-screen TVs in Racine County.  The concessions include exemption from environmental protection laws (how do they get around the federal laws?  Well, ask the Trump administration), exemption from lawsuits (automatic stay, subject to appeal), and a $2.85 billion offset in taxes, which is three times the state’s annual education budget.  Chris types this deal as China (in a sense) forcing (in a much truer sense) an economically disadvantageous “treaty,” the reverse of the treaties forced on China after the Boxer Rebellion and the Opium Wars.

Here’s where math and technology come in.  The math: payback for Wisconsin via added payroll taxes and such is estimated to take 25 years.  Will the factory last that long?  Recall a number of failed schemes, on scales from tens to thousands of jobs bought, then lost.  The technology: please name me a modern technology that is still in production after 25 years.  Blackberry?  PDAs? Car phones? Sure, the plant could move to producing other items…maybe.  Plant closures and moves to other nations are the more common fate.

Gov. Walker and Wisconsin legislators: I think the education budget was misspent during your childhood, or else you would have learned critical thinking.

Other cities and states chasing new corporate investments are lining up to do just as bad deals.  Amazon is seeking to locate a second headquarters outside of Seattle, for a final employees headcount of about 50,000.  Even my home state of New Mexico is delusional about this, ignoring the lessons of corporate giveaways, of which Foxconn is an example nationally and Spaceport America  islocally, and ignoring the record of businesses not locating here because of, it seems on good evidence, lack of an educated workforce.  Not going to happen, luckily for us.

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