Factory deal Trump touted puts the ‘con’ in ‘Foxconn’ — and how taxpayers will get taken

(THIS ARTICLE IS COURTESY OF THE LOS ANGLES TIMES)

 

How a factory deal Trump touted puts the ‘con’ in ‘Foxconn’ — and how taxpayers will get taken

The entirety of President Trump’s job-creation strategy was visible July 26 during a White House ceremony to announce a deal bringing a $10-billion video-screen factory for the Taiwan electronics company Foxconn to southeastern Wisconsin.

The elements included a claim about the number of jobs that was unverifiable and not believable; a description of the cost and terms of the $3 billion in tax incentives dangled in front of Foxconn that concealed their astronomical cost for Wisconsin taxpayers; the presence of political sycophants (in this case, Vice President Mike Pence, Wisconsin Gov. Scott Walker and House Speaker Paul Ryan, [R-Wis.]) to attest to Trump’s role in negotiating the deal; and grandiose assertions by Trump himself that it’s all about him: “If I didn’t get elected, he wouldn’t be spending $10 billion,” Trump said of Foxconn Chairman Terry Gou, also in attendance.

Left unexpressed were doubts that the factory would ever actually be built, and that even if so, it would employ the extraordinary workforce of 13,000 that was claimed. Reporters on hand might have delved into that issue, but no questions were permitted.

So let’s provide some of the context that was overlooked on that occasion. Experts who have examined the proposed deal, which must be approved by the Wisconsin Legislature, have concluded that it won’t begin to pay off for state taxpayers for more than two decades, if then — or ever.

A good portion of the jobs will go not to Wisconsin workers, but to residents of Illinois, meaning that Wisconsinites will pay, and their cross-border neighbors will profit. The deal would exempt the Foxconn plant from a host of environmental regulations, placing the local water supply and ecology at risk.

In other words, the announcement was all flash and precious little substance. But what substance is known is disturbing.

“This is a transfer of wealth from Wisconsin taxpayers to Foxconn shareholders,” says Greg LeRoy, the head of Good Jobs First, which tracks government economic incentives handed over to corporations. LeRoy observes that even if the plant reaches its projected complement of 13,000 workers, that means the deal would cost about $230,000 per job.

“The average worker at Foxconn is never going to pay $230,000 more in state and local taxes than the public services she and her family will consume during her work tenure there,” he says. “For the taxpayers, it’s a guaranteed loser.” If the size of the workforce falls short, he noted, the cost per job could be much higher.

Under Gov. Walker, who briefly ran for the Republican presidential nomination last year, Wisconsin has been something of a sinkhole in economic development schemes. After Walker privatized the state’s main job-development agency, it became ensnared in scandal after scandalwhile failing to make much of a mark on job growth. The defining job program of Walker’s administration was a $6-million grant in 2014 to Ashley Furniture, which was allowed to lay off half of its 3,800 Wisconsin workers as part of the deal. A few weeks after the grant from the Wisconsin Economic Development Corp. was approved, Ashley’s owners donated $20,000 to the reelection campaign of the development group’s chairman, Gov. Walker.

The Foxconn proposal boasts similar elements of a glittery political veneer concealing signs of rot from the inside out. One blow was landed in Madison on Aug. 8 by the Legislative Fiscal Bureau, which analyzes bills with budget implications. Among other points, the bureau pointed out that Foxconn would receive at least $1.35 billion and possibly as much as $2.9 billion in tax incentive payments even if it didn’t owe any Wisconsin tax, that increased state tax revenue from job growth wouldn’t offset the incentive spending until at least 2042 — and then only if the full complement of 13,000 jobs was reached and all went to Wisconsin residents.

But the bureau acknowledged that anywhere from 10% to half of the jobs could go to nonresidents. That’s because the proposed factory site in the Racine-Kenosha area — Paul Ryan’s home district — is within easy commuting distance of Illinois. If there are fewer jobs, and fewer go to state residents, the bureau said, the break-even point could be years or decades later.

Whether the plant ever will host 13,000 workers is doubtful; the legislative analysis acknowledged that some estimates place the probable payroll as low as 3,000. Trump touted the plant as a “state-of-the-art manufacturing facility,” but state-of-the-art electronics factories are replacing human assembly workers with robots, a trend the efficiency-minded Foxconn is unlikely to abandon.

The most important aspect of Trump’s participation in the Foxconn announcement may be what is says about his job development policies. They don’t seem to be aimed at anything special except generating photo opportunities. Foxconn itself is getting a reputation for making lavish promises and letting them lapse, as appears to have been the case with a project the company touted for Harrisburg, Pa., in 2013. That deal was for a $30-million plant employing 500 workers. But the plant hasn’t materialized.

Ever optimistic, Pennsylvania officials participated in a seven-state beauty contest Foxconn staged this year, playing Pennsylvania and Wisconsin off against Illinois, Indiana, Michigan, Ohio and Texas in its quest for the most lavish state and local incentives. This race to the bottom has the effect of all but eliminating any genuine economic gains the ostensible winner can claim from landing the plant.

Yet Trump explicitly endorsed such interstate shakedowns in December, when he bragged about keeping a Carrier air conditioning plant in Indiana. Employers “can leave from state to state and they can negotiate good deals with the different states and all of that,” Trump said then. “But leaving the country is going to be very, very difficult.”

Even Trump’s victory in the Carrier episode was predictably ephemeral. Even though the company supposedly pledged to retain more than 1,000 jobs rather than move them to Mexico, in June it emerged that Carrier will lay off more than 600 of its workers by the end of this year.

In Wisconsin, Foxconn is insisting that the state Legislature enact the package of proposed incentives by the end of September, or no deal. That means that for all the preening at the White House last month, the deal may end up like others sponsored by Trump and offered by Foxconn: real hype and false hopes.

Kansas Shooter’s Actions Cannot And Do Not Speak For How Vast Majority Of Americans Believe

(THIS ARTICLE IS COURTESY OF THE HINDUSTAN TIMES NEWS)

Kansas shooter’s actions cannot and do not speak for US

WORLD Updated: Feb 26, 2017 07:05 IST

Yashwant Raj
Yashwant Raj
Hindustan Times, Washington

Kansas

Srinivas Kuchibhotla (right) with his wife Sunayana Dumala in Iowa. Kuchibhotla was shot at a bar in Olathe, Kansas.(AP File)

Sri Srinivasan’s family moved to Kansas when he was only four. He grew up a basketball fanatic, going to the same high school as a future star of the sport. And eventually went on to become the first Indian-American judge of a court of appeals, roughly like India’s high court, and was a top contender for a vacancy that fell open on the US supreme court bench in 2016, which would have been historic in many ways — as the first Indian-American, the first Asian-American and the first Hindu American named justice to the highest court in the country.Judge Srinivasan, as he is called, grew up in Lawrence, a 30-minute drive from Olathe, where an apparently inebriated US navy veteran killed Srinivas Kuchibotla, an IT engineer from Hyderabad, past Wednesday mistaking him for a Middle-Easterner, and telling him to “get out of my country”. Investigators are still trying to determine the exact motives of the shooter, Adam Purinton, but he will not be the first American to feel that way about people from the Middle-East, specially after the September 11, 2001 attacks.

But does the shooting make the United States less of a destination for anyone with dreams of making it big as Satya Nadella, Microsoft CEO from Hyderabad, Sunder Pichai, Google CEO from further south Chennai, or Vinod Khosla, co-founder of Sun Microsystems from Delhi? Less safe? After all, how could a drink at a bar with a colleague after work end so badly?

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Is President Donald Trump’s America any less safe? While condemning the killings, the White House has dismissed any links to the president’s rhetorics as has been suggested by some, but there are worries and concerns arising out of a surge in ethnic, religious and racial tensions in the aftermath of his election.

But Purinton cannot, and does not speak for Kansas or the United States. Judge Srinivasan has never complained about racial slights he or his family might have faced growing up in Kansas and local news publications had covered his elevation to the appeals court and his possible move to the Supreme Court with unrestrained pride.

Adam Purinton of Olathe, Kansas, who shot Indian engineer Srinivas Kuchibhotla. (REUTERS)

He was one of them, and they wanted to celebrate his achievements as they would of anyone else. He might have, as all immigrants, faced stereotyping — Indians are mocked, often by Indian comics — for nodding their head excessively as they listen; their accent, and they may have all faced one time or another intended or unintended slights.

Things can get worse, and have gotten worse for some. Balbir Singh Sandhu, an immigrant from Punjab, became the first victim of the backlash after the September 9, 2001, terrorist attack. He was shot dead at his gas station in Arizona by a man who mistook him for a Middle-Easterner. Six men and women were gunned down by a white supremacist an attack on a Wisconsin gurudwara in 2013. But Sandhu’s relatives chose to stay, and so have those of Wisconsin victims.

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And it may not be pointed out to those feeling uncertain, don’t forget Ian Gillort, the Kansas man who was shot by Purinton trying to save Kuchibotla and his colleague Alok Madasani. “No, it’s not like that,” Grillot said in a vide about being hailed as a hero. “I was just doing what anyone should have done for another human being. It’s not about where he was from or his ethnicity. We’re all humans. I just felt I did what was naturally right to do.” His sister has said he wishes he could have done more.

It is reasonable to feel unsafe and insecure after every such incident, but, as a young immigrant from India, said Friday, “People back home must realize the US is no less safe today than it was yesterday or the day before, or tomorrow.”

Democratic Leaders Seem To Think That Working Class White People Are Just Ignorant Racists: The Truth Is, It Is They Who Are!

(THIS ARTICLE IS COURTESY OF THE HARVARD BUSINESS REVIEW)

What So Many People Don’t Get About the U.S. Working Class

NOVEMBER 10, 2016
  • Harvard Business Review, July/August 2016
    My father-in-law grew up eating blood soup. He hated it, whether because of the taste or the humiliation, I never knew. His alcoholic father regularly drank up the family wage, and the family was often short on food money. They were evicted from apartment after apartment.

He dropped out of school in eighth grade to help support the family. Eventually he got a good, steady job he truly hated, as an inspector in a factory that made those machines that measure humidity levels in museums. He tried to open several businesses on the side but none worked, so he kept that job for 38 years. He rose from poverty to a middle-class life: the car, the house, two kids in Catholic school, the wife who worked only part-time. He worked incessantly. He had two jobs in addition to his full-time position, one doing yard work for a local magnate and another hauling trash to the dump.

Throughout the 1950s and 1960s, he read The Wall Street Journal and voted Republican. He was a man before his time: a blue-collar white man who thought the union was a bunch of jokers who took your money and never gave you anything in return. Starting in 1970, many blue-collar whites followed his example. This week, their candidate won the presidency.

For months, the only thing that’s surprised me about Donald Trump is my friends’ astonishment at his success. What’s driving it is the class culture gap.

One little-known element of that gap is that the white working class (WWC) resents professionals but admires the rich. Class migrants (white-collar professionals born to blue-collar families) report that “professional people were generally suspect” and that managers are college kids “who don’t know shit about how to do anything but are full of ideas about how I have to do my job,” said Alfred Lubrano in Limbo. Barbara Ehrenreich recalled in 1990 that her blue-collar dad “could not say the word doctorwithout the virtual prefix quack. Lawyers were shysters…and professors were without exception phonies.” Annette Lareau found tremendous resentment against teachers, who were perceived as condescending and unhelpful.

Michèle Lamont, in The Dignity of Working Men, also found resentment of professionals — but not of the rich. “[I] can’t knock anyone for succeeding,” a laborer told her. “There’s a lot of people out there who are wealthy and I’m sure they worked darned hard for every cent they have,” chimed in a receiving clerk. Why the difference? For one thing, most blue-collar workers have little direct contact with the rich outside of Lifestyles of the Rich and Famous. But professionals order them around every day. The dream is not to become upper-middle-class, with its different food, family, and friendship patterns; the dream is to live in your own class milieu, where you feel comfortable — just with more money. “The main thing is to be independent and give your own orders and not have to take them from anybody else,” a machine operator told Lamont. Owning one’s own business — that’s the goal. That’s another part of Trump’s appeal.

Hillary Clinton, by contrast, epitomizes the dorky arrogance and smugness of the professional elite. The dorkiness: the pantsuits. The arrogance: the email server. The smugness: the basket of deplorables. Worse, her mere presence rubs it in that even women from her class can treat working-class men with disrespect. Look at how she condescends to Trump as unfit to hold the office of the presidency and dismisses his supporters as racist, sexist, homophobic, or xenophobic.

Trump’s blunt talk taps into another blue-collar value: straight talk. “Directness is a working-class norm,” notes Lubrano. As one blue-collar guy told him, “If you have a problem with me, come talk to me. If you have a way you want something done, come talk to me. I don’t like people who play these two-faced games.” Straight talk is seen as requiring manly courage, not being “a total wuss and a wimp,” an electronics technician told Lamont. Of course Trump appeals. Clinton’s clunky admission that she talks one way in public and another in private? Further proof she’s a two-faced phony.

Manly dignity is a big deal for working-class men, and they’re not feeling that they have it. Trump promises a world free of political correctness and a return to an earlier era, when men were men and women knew their place. It’s comfort food for high-school-educated guys who could have been my father-in-law if they’d been born 30 years earlier. Today they feel like losers — or did until they met Trump.

Manly dignity is a big deal for most men. So is breadwinner status: Many still measure masculinity by the size of a paycheck. White working-class men’s wages hit the skids in the 1970s and took another body blow during the Great Recession. Look, I wish manliness worked differently. But most men, like most women, seek to fulfill the ideals they’ve grown up with. For many blue-collar men, all they’re asking for is basic human dignity (male varietal). Trump promises to deliver it.

The Democrats’ solution? Last week the New York Times published an article advising men with high-school educations to take pink-collar jobs. Talk about insensitivity. Elite men, you will notice, are not flooding into traditionally feminine work. To recommend that for WWC men just fuels class anger.

Isn’t what happened to Clinton unfair? Of course it is. It is unfair that she wasn’t a plausible candidate until she was so overqualified she was suddenly unqualified due to past mistakes. It is unfair that Clinton is called a “nasty woman” while Trump is seen as a real man. It’s unfair that Clinton only did so well in the first debate because she wrapped her candidacy in a shimmy of femininity. When she returned to attack mode, it was the right thing for a presidential candidate to do but the wrong thing for a woman to do. The election shows that sexism retains a deeper hold that most imagined. But women don’t stand together: WWC women voted for Trump over Clinton by a whopping 28-point margin — 62% to 34%. If they’d split 50-50, she would have won.

Class trumps gender, and it’s driving American politics. Policy makers of both parties — but particularly Democrats if they are to regain their majorities — need to remember five major points.

Understand That Working Class Means Middle Class, Not Poor

The terminology here can be confusing. When progressives talk about the working class, typically they mean the poor. But the poor, in the bottom 30% of American families, are very different from Americans who are literally in the middle: the middle 50% of families whose median income was $64,000 in 2008. That is the true “middle class,” and they call themselves either “middle class” or “working class.”

“The thing that really gets me is that Democrats try to offer policies (paid sick leave! minimum wage!) that would help the working class,” a friend just wrote me. A few days’ paid leave ain’t gonna support a family. Neither is minimum wage. WWC men aren’t interested in working at McDonald’s for $15 per hour instead of $9.50. What they want is what my father-in-law had: steady, stable, full-time jobs that deliver a solid middle-class life to the 75% of Americans who don’t have a college degree. Trump promises that. I doubt he’ll deliver, but at least he understands what they need.

Understand Working-Class Resentment of the Poor

Remember when President Obama sold Obamacare by pointing out that it delivered health care to 20 million people? Just another program that taxed the middle class to help the poor, said the WWC, and in some cases that’s proved true: The poor got health insurance while some Americans just a notch richer saw their premiums rise.

Progressives have lavished attention on the poor for over a century. That (combined with other factors) led to social programs targeting them. Means-tested programs that help the poor but exclude the middle may keep costs and tax rates lower, but they are a recipe for class conflict. Example: 28.3% of poor families receive child-care subsidies, which are largely nonexistent for the middle class. So my sister-in-law worked full-time for Head Start, providing free child care for poor women while earning so little that she almost couldn’t pay for her own. She resented this, especially the fact that some of the kids’ moms did not work. One arrived late one day to pick up her child, carrying shopping bags from Macy’s. My sister-in-law was livid.

J.D. Vance’s much-heralded Hillbilly Elegy captures this resentment. Hard-living families like that of Vance’s mother live alongside settled families like that of his biological father. While the hard-living succumb to despair, drugs, or alcohol, settled families keep to the straight and narrow, like my parents-in-law, who owned their home and sent both sons to college. To accomplish that, they lived a life of rigorous thrift and self-discipline. Vance’s book passes harsh judgment on his hard-living relatives, which is not uncommon among settled families who kept their nose clean through sheer force of will. This is a second source of resentment against the poor.

Other books that get at this are Hard Living on Clay Street (1972) and Working-Class Heroes (2003).

Understand How Class Divisions Have Translated into Geography

The best advice I’ve seen so far for Democrats is the recommendation that hipsters move to Iowa. Class conflict now closely tracks the urban-rural divide. In the huge red plains between the thin blue coasts, shockingly high numbers of working-class men are unemployed or on disability, fueling a wave of despair deaths in the form of the opioid epidemic.

Vast rural areas are withering away, leaving trails of pain. When did you hear any American politician talk about that? Never.

Jennifer Sherman’s Those Who Work, Those Who Don’t (2009) covers this well.

If You Want to Connect with White Working-Class Voters, Place Economics at the Center

“The white working class is just so stupid. Don’t they realize Republicans just use them every four years, and then screw them?” I have heard some version of this over and over again, and it’s actually a sentiment the WWC agrees with, which is why they rejected the Republican establishment this year. But to them, the Democrats are no better.

Both parties have supported free-trade deals because of the net positive GDP gains, overlooking the blue-collar workers who lost work as jobs left for Mexico or Vietnam. These are precisely the voters in the crucial swing states of Ohio, Michigan, and Pennsylvania that Democrats have so long ignored. Excuse me. Who’s stupid?

One key message is that trade deals are far more expensive than we’ve treated them, because sustained job development and training programs need to be counted as part of their costs.

At a deeper level, both parties need an economic program that can deliver middle-class jobs. Republicans have one: Unleash American business. Democrats? They remain obsessed with cultural issues. I fully understand why transgender bathrooms are important, but I also understand why progressives’ obsession with prioritizing cultural issues infuriates many Americans whose chief concerns are economic.

Back when blue-collar voters used to be solidly Democratic (1930–1970), good jobs were at the core of the progressive agenda. A modern industrial policy would follow Germany’s path. (Want really good scissors? Buy German.) Massive funding is needed for community college programs linked with local businesses to train workers for well-paying new economy jobs. Clinton mentioned this approach, along with 600,000 other policy suggestions. She did not stress it.

Avoid the Temptation to Write Off Blue-Collar Resentment as Racism

Economic resentment has fueled racial anxiety that, in some Trump supporters (and Trump himself), bleeds into open racism. But to write off WWC anger as nothing more than racism is intellectual comfort food, and it is dangerous.

National debates about policing are fueling class tensions today in precisely the same way they did in the 1970s, when college kids derided policemen as “pigs.” This is a recipe for class conflict. Being in the police is one of the few good jobs open to Americans without a college education. Police get solid wages, great benefits, and a respected place in their communities. For elites to write them off as racists is a telling example of how, although race and sex-based insults are no longer acceptable in polite society, class-based insults still are.

I do not defend police who kill citizens for selling cigarettes. But the current demonization of the police underestimates the difficulty of ending police violence against communities of color. Police need to make split-second decisions in life-threatening situations. I don’t. If I had to, I might make some poor decisions too.

Saying this is so unpopular that I risk making myself a pariah among my friends on the left coast. But the biggest risk today for me and other Americans is continued class cluelessness. If we don’t take steps to bridge the class culture gap, when Trump proves unable to bring steel back to Youngstown, Ohio, the consequences could turn dangerous.

In 2010, while on a book tour for Reshaping the Work-Family Debate, I gave a talk about all of this at the Harvard Kennedy School. The woman who ran the speaker series, a major Democratic operative, liked my talk. “You are saying exactly what the Democrats need to hear,” she mused, “and they’ll never listen.” I hope now they will.


Joan C. Williams is Distinguished Professor of Law and Founding Director of the Center of WorkLife Law at the University of California, Hastings College of the Law.