Perspective on Foxconn under the new political administration

4 Replies

The local Racine newspaper published its speculation on whether and to what extent the Foxconn development will be affected by the incoming political administration in Madison:

Right now, it's all a lot of speculation. I believe that Foxconn has the momentum and that the new governor would commit political suicide if he did anything adverse to the deal.  

I don't see much changing.  Foxconn had to have insurances in place incase Walker was not re elected.

It will be interesting to see what happens. I personally don't like the deal AT ALL, and hope things change to some degree. I would not want to be 'betting' my investments on a somewhat shaky sketchy plan.

Just think if us small private US and Wisconsin based businesses would get even a FRACTION of what this is costing per job? And, it sounds like a majority of the workers are likely to be foreign or from Illinois also, so why is just WI funding this?

Study after study shows that the smaller the business to a degree that gets incentives the better the economic benefit is. This is costing up to almost $1,00,000,000 before jobs are even created, and somewhere between $300,000 and $800,000 PER JOB if things 'go good'!?!?!

In my 'day job' of Remodeling, if I got a $100,000 incentive, I could easily create at least one job that paid at least 50K per year, if not 2-3 jobs that paid that. 

I guess the rest of the state is a little miffed at why WE are each paying 3-4K per household for jobs for Illinois and China?

Dan Dietz

It is difficult to find reliable information about the Foxconn deal. Most ressources are putting their own spin on facts, so you find "calculations" that support either pro or contra arguments.

Frankly, I am not sure if I can tell how good of a deal it is.

However, there is a fundamental difference between a company or an individual is spending money and a goverment spending money. If I spend money, it's simply gone and I don't have it anymore to spend on other things. If a goverment is spending money on something, it is not necessarily gone (it can be) - it starts flowing through the economy and becomes a stimulus. Remember Helicopter Ben's quantitaive easements?

If Wisconsin is spending money on let's say road improvements and pay construction companies to do so, those funds are not "spent" or gone. They will now pay salaries to the workers, expenses to suppliers, investments in construction equipment and profits to the owners, who hopefully in turn spend it on something, so additional money is flowing through the system, which the system experiences as an economic boost.

So the real question becomes, what hapens with the money after is has been "spent" by the goverment. In short: if it starts flowing through Wisconsin (or at least the US) it's probably a good thing, if it get's funneled into a Taiwanese bank account it's literally gone. I can't tell which one it will be and to what extend funds may or may not leave the region with Foxconn.

What I always tell my investor clients is to make investements that don't depend on Foxconn. If the deal comes together as some hope it will float all boats in SE Wisconsin, and if it doesn't you'll be glad you did not depend on it and will profit from the general economic momentum the area is experiencing. 

It would be political suicide for Evers not to follow through on the deal.  It would be create a precedent where ANY business from out of state that is looking to transfer their business to Wis wouldn't be able to trust Evers (even if he didn't make the deal).  

Despite where the workers may come from originally it increases the number of consumers in Wisconsin for everything from rentals to food to retail.  This will have a more significant impact on Wisconsin that Amazon did. Amazon was able to pull from our pool of workers rather than bring in additional residents because Amazon's work was "unskilled" per say.  Wisconsin doesn't have the pool of workers to fulfill all the needs for FoxComm so they will bring qualified workers here.  Most any way you look at it more bodies in Wisconsin means more $ for Wisconsin.   

You can find the liberal version of the facts somewhere as well as the conservative version if of the facts.  The only thing that will be correct is the scene in Wisconsin 5 years from now.  Only then will we know who was truly right. 

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