The Foxconn Wisconsin Deal Has Devolved Into A Pile Of Shifting Promises, Buzzwords, And Hype

from the prey-I-don't-alter-our-deal-further dept

Last year, you'll recall that Wisconsin Governor Scott Walker signed what at the time was treated as a revolutionary deal: the state promised Taiwan-based Foxconn a $3 billion state subsidy if the company invested $10 billion in a Wisconsin plant that created 13,000 jobs. Walker hoped that the deal would finally help cement job growth that he had promised his supporters for years, and the press was quick to hype the plan without really giving it too much thought. Quietly, Wisconsin’s non-partisan Legislative Fiscal Bureau was busy pointing out that it would take until 2043 for taxpayers to recoup the subsidy, though that obviously took second fiddle to the hype of bringing American jobs back from overseas to focus on cool new tech.

But as the details of the plan solidified by late last year, the $3 billion subsidy quickly ballooned to $4.1 billion, and some folks quietly began to notice that the math really didn't make much sense:

"Wisconsin currently has an unemployment rate of 3.2%, so they are only so many workers available locally. Realistically, the payback period for a $100,000 per job deal is not 20 years, not 42 years, but somewhere between hundreds of years and never. At $230,000 or $1 million per job, there is no hope of recapturing the state funds spent from taxes on the company and its workers."

Many now doubt whether the subsidy will ever pay for itself. This week, The Verge offered up a new piece dissecting the deal and it's well worth a read. It notes that while the scope of the subsidies Foxconn would receive slowly ballooned, the promised factory Foxconn was supposed to build kept shrinking in size and scope. Instead of building 10-foot by 11-foot panels for 75-inch TV screens, Foxconn would be building a Generation 6 plant that only produces 5-foot by 6-foot glass panels.

Instead of a 10.5 plant needing $10 billion in investment (Foxconn's original promise), the Gen 6 plant actually being built requires about a $2.5 billion investment. And still, the scope of the promised plant continued to shrink:

"But Foxconn officials also said that the company was still committed to a $10 billion investment and 13,000 jobs, adding it might eventually add a Gen 10.5 plant, but it would get there in “phases.” The phases were not spelled out.

Just seven weeks later, in late August, the company announced the plans had changed yet again — far more radically. Woo told the Racine Journal Times that Foxconn would never add a Gen 10.5 plant to its Racine campus, despite past statements, because by the time it was built, the market would be glutted by other manufacturers in China."

Of course none of this should really be surprising, especially given that Foxonn has made similar, magically-shrinking promises of similar ilk in countries like Vietnam, India, and Brazil. And this is all before you seriously consider the environmental impact of the arrangement, which many aren't. At this point, the fading promises have become almost comedic in nature (if you ignore taxpayers footing the bill for the kerfuffle). Vast plans to build a major panel manufacturer plant with thousands of new jobs have been replaced by hype, buzzwords, and nonsense:

"Even the Gen 6 panels might not be manufactured in Racine for long. “We are not really interested in television,” Woo told the newspaper, though he said the company wants to build America’s first thin-film transistor (TFT) fabrication, which can be used in LCD products. Rather, Woo said, workers at the Wisconsin plant will be focused on figuring out new ways to use Foxconn’s display, cellular, and AI technology, building out an “ecosystem” Woo calls “AI 8K+5G."

We've already noted that 5G is important but violently over-hyped, and this idea of an "AI 8K+5G ecosystem" is largely meaningless (they really should have thrown a blockchain reference in for good measure). A May 2018 poll of locals found that 66% doubted the deal would ever actually meaningfully benefit the local economy, and the plan isn't having anywhere near the impact on polling that Walker had hoped ahead of the midterms. At this rate, Wisconsin will be lucky to see a few thousand jobs in exchange for an investment most objective observers doubt will ever actually pay for itself.

Filed Under: crony capitalism, factories, jobs, scott brown, subsidies, wisconsin
Companies: foxconn

Upstart, Anti-Corruption Campaigns In NY, NH Don't Win, But Do Show Growing Anger Over Political Corruption

from the a-good-start,-but-not-over-yet dept

To the "savvy" political insiders, political corruption is still not seen as an election issue that people care about or vote over. We've been discussing a number of attempts to change that -- such as with new anti-corruption PACs -- and two of the political races we've discussed ended yesterday. In both cases, the candidates lost, but they way outperformed their expectations, suggesting that there's a real possibility of a better reaction in the future.

In NY, the Governor/Lt. Governor primary ticket of Zephyr Teachout/Tim Wu was always a tremendous long shot. Going up against a popular incumbent governor in Andrew Cuomo (who also has tremendous NY name recognition as the son of a former -- also tremendously popular -- NY governor), the media more or less ignored any possibility of Teachout succeeding. The campaign had little money and no real established political base. It ran almost entirely on the basis of "Hey, Cuomo is kind of corrupt and lies a lot." Before the election yesterday, an analysis of similar races suggested that incumbent governors in similar primaries often get over 90% of the vote and anything under 70% would be a political disaster for Cuomo, who is hoping to leverage his success in NY into an eventual presidential run. While he did eventually win, it was with about 62% of the vote. Teachout got 34% -- again, with no political machine and very little money. Wu ended up with just over 40%, and his opponent Kathy Hochul (Cuomo's choice) got under 60%.

Obviously, a win would have been a bigger deal, but to come out of nowhere (in just a couple of months), with no huge campaign war chest or connections to traditional politics -- against such a well-known governor, basing most of their campaign on corruption issues -- this suggests that corruption absolutely can play as an election issue. Teachout and Wu had one paid staffer and four volunteers. Cuomo has a campaign war chest in the many millions. And he still could only barely crack 60% of the vote. That says something. Also interesting is the fact that Teachout and Wu actually won in many rural upstate counties. The campaign had been expecting a weaker showing there (Hochul is from upstate, and Teachout and Wu are based in Manhattan -- which they also won). Again, while losing the overall race, the strong showing is a good sign for future campaigns.

Meanwhile, up in New Hampshire, we'd discussed the campaign of Jim Rubens for the Senate, against carpetbagging Scott Brown (who jumped states from Massachusetts after losing his Senate seat there). Early on, Rubens was basically a complete nobody. While he'd been in NH politics in the past, he hadn't actually occupied a political office since the 1990s. He was basically roadkill for the political machine of Scott Brown. However Larry Lessig's Mayday PAC noted that Rubens was the only Republican candidate running on an anti-corruption platform to limit the influence of money in politics. Mayday PAC spent heavily on campaign ads for Rubens, and he ended up getting around 24% of the vote, with Brown pulling in less than 50%.

In the end, both of these campaigns obviously lost -- but they were interesting experiments with important lessons. Two upstart campaigns from totally different sides of the traditional political spectrum (Zephyr/Wu to the "left" and Rubens to the "right"), both of which made anti-corruption efforts a key plank in their campaigns. Both were considered barely worth mentioning at the beginnings of the campaigns. Both were up against incredibly well-known, well-funded political machines with national name recognition and ambition. Neither campaign had any significant money. And both actually performed decently despite their disadvantages.

In the end, both campaigns definitely did lose, but they showed how there's clearly a dissatisfaction with the traditional political machine. And if two such tiny, out-of-nowhere campaigns could do that, hopefully it means that future campaigns can do even more.

Filed Under: andrew cuomo, corruption, kathy hochul, larry lessig, money in politics, new hampshire, new york, politics, primaries, scott brown, tim wu, zephyr teachout
Companies: mayday pac

Former Senator Scott Brown's Staff Sends Larry Lessig A Letter Demanding He Stop Referring To Brown As A 'Lobbyist'

from the stop-using-the-truth-to-smear-our-candidate! dept

Larry Lessig's new SuperPAC must be making a few people in Washington nervous. That's the only thing that could explain former Sen. Scott Brown's office sending a little hate mail demanding an apology for calling the former politician a "lobbyist." [PDF link]

Sent by Colin Reed, the campaign manager for New Hampshire for Scott Brown, the letter opens this way and doesn't let up.

Your MAYDAY Super PAC has issued a piece of mail to New Hampshire voters falsely calling Scott Brown a 'Washington lobbyist.' This is a flat-out lie.

Scott Brown is not nor has he ever been a lobbyist. Ever. We call on you to immediately cease and desist with the mailer in question, and to use one of your various media appearances as a purported authority on ethics to retract your falsehood.

As Lessig points out, Brown not being a lobbyist largely depends on what a normal person would think a lobbyist is. He quotes The Hill, which details Brown's post-Senate employment.

I take it Mr. Reed’s outrage is triggered by the Senate’s regulations of what constitutes being a “lobbyist” for purposes of the Senate rules. I hadn’t received the memo that explained that the English language is now regulated by the rules of the United States Senate. If there is such a memo, they should send it to The Hill too. Here are a few snippets of what they reported last March:

Brown has joined Nixon Peabody, a law and lobby firm, as counsel in the firm’s Boston office. The Massachusetts Republican, also a former state senator, will concentrate his practice on “business and governmental affairs as they relate to the financial services industry as well as on commercial real estate matters,” according to the firm.

Nixon Peabody has a burgeoning K Street practice, having made more than $1.5 million in lobbying fees for all of 2012, according to the Center for Responsive Politics...

So yes, according to the Senate, Scott Brown isn’t a “lobbyist.” But I submit to anyone else in the world, a former Senator joining a “law and lobbying firm” to help with Wall St’s “business and governmental affairs” is to make him a lobbyist. Because to anyone else in the world, when you sell your influence to affect “business and governmental affairs,” you are a lobbyist.

Other news sources agree. Brown now holds the position of "counsel" in a lobbying firm. This may not exactly make him a lobbyist but it certainly makes him more lobbyist than "counsel." The only thing likely preventing Brown from retaining the title of 'lobbyist' are rules meant to keep this sort of revolving-door behavior from being so blatant and prevalent.

The Boston Globe noted Monday that while Brown himself will not be a lobbyist — Senators may not lobby their former colleagues for the first two years after leaving office, under the Honest Leadership and Open Government Act of 2007 — “he will be leaning heavily on his Washington contacts to drum up business for the firm.” The position will also allow him “to begin cashing in on his contacts with the financial services industry, which he helped oversee in the Senate.”

So, not technically a lobbyist but as close to a lobbyist as one can get. The overblown letter also calls into question Lessig's "Harvard code of conduct" and hilariously refers to the Mayday SuperPAC's letter as evidence of Lessig's "partisan political agenda" -- apparently unaware of the fact that Lessig is backing a Republican candidate against Brown in the upcoming New Hampshire election.

The letter wraps up with the following threat:

If you fail to immediately cease the mailer in question, we are leaving all our legal options on the table.

Lessig has responded to this angry letter in three ways, all of which suggest a dearth of respect for Scott Brown or his purported legal representation. First, there's the last line of his blog post about the letter:

And finally, as for those “legal options” that Mr. Reed says he’s “leaving on the table,” let me offer the words of Harry Callahan: “Go ahead. Make my day.”

And this tweet.

Yea, an institution that calls ketchup a vegetable doesn't get to tell me how to speak English. http://t.co/mjBTc4bNP0

— Lessig (@lessig) September 7, 2014

If you can't read the tweet, it says:

Yea, an institution that calls ketchup a vegetable doesn't get to tell me how to speak English.

And, finally, Lessig did, in fact, change Mayday's ad as follows. The top one is the original ad, the bottom one is the "new" ad:
Someone set the "table." I'll make popcorn.

Filed Under: influence, jim rubens, larry lessig, lobbying, lobbyist, money in politics, scott brown
Companies: mayday pac

Two SuperPACs Focused On Ending SuperPACs Release New TV Commercials

from the gotta-spend-the-money-to-stop-the-money dept

We've been writing up some of the new political efforts to try to put some limits on money in politics, including Larry Lessig's Mayday SuperPAC, Represent.us' satirical campaign for the "most honest politician," Gil Fulbright, and also CounterPAC, a SuperPAC that tries to get politicians to take a pledge not to accept dark money.

They're all moving forward with their goals, and two new commercials have come out that are worth highlighting. First, Represent.us has teamed up with Mayday in their effort to promote Jim Rubens, the (generally considered to be a long shot) candidate for Senate in New Hampshire. They've sent "Gil Fulbright" to New Hampshire to "campaign" for Rubens' opponent (and former Massachusetts Senator) Scott Brown. The ad is well worth watching: In case you can't watch it, here's a basic transcript of the text stated by the exceptionally honest Gil Fulbright:

I'm a career politician and this is an unprovoked attack on Jim Rubens. And I'm in it!

You see, me and my buddy, Scott Brown (shows picture of Brown making the "call me" sign), we want to take your tax dollars and hand them out to the cronies and lobbyists who bankroll our political campaigns.

But this Jim Rubens guy? He wants to stop corruption in Washington. He thinks it's his job to help the people of New Hampshire.

Career politicians like me? We've got a sweet thing going on. Do not let Jim Rubens screw that up.

This is a bit different from some of Mayday's earliest commercial spots which I thought were a bit weak. Frankly the first few radio ads (which, for some reason seem to have disappeared from Soundcloud where they were) sounded a little off. Lessig is a great presenter, but I'm not sure he's the best radio voice. Though, the latest TV commercial for Ruben Gallego (which also uses Lessig's voiceover) is stronger than those first few radio ads: Finally, CounterPAC has also launched its first TV ads, including this one involving a sky diver, calling on Georgia Senate candidates Michelle Nunn and David Perdue to pledge to deny dark money in their campaigns (they also have a nearly identical ad targeting Alaska Senate candidates Mark Begich and Dan Sullivan). The production value of the ad is a bit weak, and it kind of buries the point of the ad, which is unfortunate.

Either way, we're seeing the first steps of these efforts to try to limit the impact of money in politics and it will be worth watching how these various campaigns work out.

Filed Under: commercials, dark money, gil fulbright, jim rubens, larry lessig, money in politics, scott brown, superpacs
Companies: counterpac, mayday pac, represent.us

Another SuperPAC Trying Another Approach To Getting 'Dark' Money Out Of Politics

from the using-the-system dept

We've written a bunch about Larry Lessig's MayDay SuperPAC and its crowdfunded attempt to elect politicians who promise to change the way money in politics works. And many users also pointed to Wolf PAC, which is another high profile political action committee committed to dealing with the issue of money in politics. Now another such PAC has been announced, kicked off by some more Silicon Valley folks, called CounterPAC, the focus is on getting candidates to take a pledge not to accept so-called "dark money".

It's based on the (mostly successful) pledge that Senate candidates Elizabeth Warren and Scott Brown took in the 2012 Massachusetts Senate race, that if any such group spent money on their campaigns, the campaigns would give a similar amount to charity. As CounterPAC notes, the pledge was a success:

It worked. Outside spending was drastically reduced to merely 9% of total spending in contrast to upwards of 60% in other states.

CounterPAC’s mission this year is to get as many candidates as possible to agree to a similar pledge rejecting untraceable dark money.

CounterPAC was apparently put together by a bunch of Silicon Valley folks, including (currently on leave from Google) Matt Cutts (who I know a little bit, but had no idea he was doing this), Ethan Beard from Greylock, well-known Silicon Valley lawyer Ted Wang and some others. It was officially started by Jim Greer (who ran the site Kongregate) and Zack Booth Simpson.

Who knows if any of these approaches will be successful, but it's encouraging to see people trying to do something different, rather than just complaining about things and being cynical and defeatist. Part of the Silicon Valley world is that you need a lot of experiments to see what works, and here's another one to throw at the wall.

Filed Under: counterpac, dark money, elizabeth warren, mayday, money in politics, pledge, scott brown, superpac

Massachusetts Senate Race Still Steers Clear Of SuperPAC Interference (Mostly)

from the good-for-them dept

I'd meant to write about this back when it was first announced, but the story got lost in the sea of unwritten stories around here. But with On The Media providing an update, I can revisit it. There's been lots of talk this election season about the rise of SuperPACs and their ability to take unlimited funds and advertise for (or against) political candidates, so long as the candidates don't "coordinate" with the SuperPAC (with "coordination" defined rather loosely). Many of the really nasty attack ads often come from those SuperPACs. However, up in Massachusetts the two major party Senate candidates surprised a lot of people by calling a "truce" back in January against SuperPACs. The way the "pledge" works, is that each candidate agrees if a SuperPAC runs an ad attacking the other one, they'll donate half the ad's costs to a charity within a few days. While the suspicious among you might think that this would lead a SuperPAC to run counteradvertising against the candidate it likes to force the other side to pay up, in reality, it appears to have mostly worked, with very little SuperPAC money showing up in Massachusetts and the TV ads not being nearly as nasty, despite it being a close fight.

Of course, some SuperPACs can't resist. Last week, Brown's campaign admitted that it had donated over $35,000 after SuperPACs had put out ads supporting him, against his own wishes. But those were fairly minor from the sound of it. On the whole, compared to other similar races, the lack of SuperPAC funding has meant a (slightly) more reasonable campaign, with not quite as much smearing.

The obvious question, then, is will other candidates in other races agree to the same kind of pledge? Unfortunately, as the OTM segment notes, that's unlikely. In most cases, SuperPAC money really benefits one party over the other, and no one wants to give up such a major advantage, even if voters think they're really annoyed by negative advertising. Tragically (from a human nature perspective), it still seems like such ads have an impact. That's really too bad on multiple levels. It would be nice if we, as a country, actually moved to a more civilized electoral process. It just seems unlikely to actually happen.

Filed Under: campaigning, elizabeth warren, massachusetts, negative advertising, pact, politics, scott brown, superpacs