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Outfoxed and conned, part 2

Summary:
I grew up in Wisconsin and still have warm feelings for the state (where it was recently 26 below zero.) Thus I’m sad to see my concerns about the new Foxconn manufacturing plant come to pass.  Here’s Tim Culpan of Bloomberg: Then-Governor Scott Walker, backed by President Donald Trump, loved exactly what he sold: the promise of thousands of jobs to make stuff in the U.S. Walker loved it so much that he pledged as much as billion in sweeteners, a deal that likely cost him his governorship. . . . Foxconn is now publicly conceding that manufacturing panels in Wisconsin isn’t viable, but still thinks it can hire just as many as originally promised. Instead of factory workers, Woo said they’ll hire for research positions as well as back-end packaging and assembly

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I grew up in Wisconsin and still have warm feelings for the state (where it was recently 26 below zero.) Thus I’m sad to see my concerns about the new Foxconn manufacturing plant come to pass.  Here’s Tim Culpan of Bloomberg:

Then-Governor Scott Walker, backed by President Donald Trump, loved exactly what he sold: the promise of thousands of jobs to make stuff in the U.S. Walker loved it so much that he pledged as much as $3 billion in sweeteners, a deal that likely cost him his governorship. . . .

Foxconn is now publicly conceding that manufacturing panels in Wisconsin isn’t viable, but still thinks it can hire just as many as originally promised. Instead of factory workers, Woo said they’ll hire for research positions as well as back-end packaging and assembly employees. Frankly, that’s wishful thinking because the U.S. doesn’t have much of a talent pool to dabble in these areas.

In 2018, the first year of the Wisconsin experiment, the company couldn’t even hit its employment target. Instead of creating a very modest 260 full-time jobs, Foxconn filled just 178 positions, Reuters reported.

It was always a waste of money, and now it looks even worse than predicted—another example of the folly of trying to use “industrial policy” to bring back jobs in manufacturing.

Update:  Just a hour ago it was reported that the project will be delayed:

The article cites a Foxconn document the financial publication obtained along with an unnamed company source who explained the decision to delay work on the Wisconsin project is in part due to “weakening macroeconomic conditions” and the ongoing U.S.-China trade dispute.

And this too:

But in an interview with Reuters, a company executive said the bulk of the jobs at the facility would be for white-collar research and engineering jobs, rather than the types of blue-collar manufacturing jobs President Donald Trump touted when he and former Gov. Scott Walker broke ground on the project last June.

So in 2016 we were told that the US economy was out of balance—lots of research jobs in Silicon Valley, and fewer and fewer blue collar manufacturing jobs.  President Trump then takes credit for bringing back manufacturing jobs with the new Foxconn plant.  Now we learn that the plant’s future is in doubt due to Trump’s trade war with China, and most of the jobs that will be created are in exactly the sort of high skilled research professions that are already doing extremely well in America.

I keep reading that the whole Davos/neoliberalism agenda is passé.  OK, but when will the replacement arrive?  Trump is already more than halfway through his term.

Scott Sumner
Scott B. Sumner is Research Fellow at the Independent Institute, the Director of the Program on Monetary Policy at the Mercatus Center at George Mason University and an economist who teaches at Bentley University in Waltham, Massachusetts. His economics blog, The Money Illusion, popularized the idea of nominal GDP targeting, which says that the Fed should target nominal GDP—i.e., real GDP growth plus the rate of inflation—to better "induce the correct level of business investment". In May 2012, Chicago Fed President Charles L. Evans became the first sitting member of the Federal Open Market Committee (FOMC) to endorse the idea.

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