Tag Archives: political economy

Foxconn’s New Deal

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In 2017, Foxconn signed a deal with Wisconsin to invest $10 billion, build an electronics manufacturing plant in the State, and hire 13,000 people by the year 2032.

Now, Foxconn has renegotiated the deal and will invest as much as $672 million and create 1,454 jobs by the year 2025.

What’s changed?

A number of things, but two in particular are the Republican Governor and Republican President in 2017, and the Progressive-Democrat Governor and the Progressive-Democrat President today.

It’s also true that the negotiated incentives are considerably less per job created under the new deal than under the old, but what does that matter to the 11,500 folks who won’t get any of those new jobs? What does that matter to the businesses—and their employees and prospective new hires—who won’t get the business associated with that earlier and much larger investment?

But hey, collateral damage happens. Nor does that damage matter to Progressive-Democrats; all they want is the look-good-in-the-shower headlines.

Progressive-Democrats’ Newspeak Dictionary

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“Infrastructure” entry. Here’s a brief list of what the Left and their Progressive-Democratic Party claim is infrastructure and what they want to spend $1.25-$1.5 trillions of your tax dollars on.

  • climate action
  • climate justice
  • affordable housing
  • green housing
  • police accountability
  • Supreme Court expansion
  • paid leave
  • child care
  • caregiving

Infrastructure is turtles, all the way down.

Que Bill the Cat.

Here’s the standard, Merriam-Webster online dictionary, definition:

1: the system of public works of a country, state, or region
2: the underlying foundation or basic framework (as of a system or organization)

And the standard, American Heritage online dictionary, definition:

1. An underlying base or foundation especially for an organization or system.
2. The basic facilities, services, and installations needed for the functioning of a community or society, such as transportation and communications systems, water and power lines, and public institutions including schools, post offices, and prisons.

I decline to surrender the dictionary to the extremists of the Left or to their Party.

Internal Tariffs

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Mercantilist tariffs (as opposed to tariffs as foreign policy tools) are purely protectionist, designed to punish competitors for competing. They’re not only aimed at foreign competition, either, as Europe’s auto industry is demonstrating [emphasis added].

Auto makers in Europe eager to boost sales of their electric vehicles have a new strategy: demanding higher taxes on conventional vehicles that burn gas and diesel fuel.
The top executives at several car and truck makers are calling on European governments to introduce the new taxes on carbon-dioxide emissions from gasoline- and diesel-powered cars and trucks as a way to help their EVs better compete.

And there’s this bit of disingenuosity [emphasis added]:

Taxing emissions from polluting vehicles, he [Volkswagen AG Chairman of the Board of Management and VW Group CEO Herbert Diess] and other executives say, would help ensure electric vehicles remain attractive for buyers after the expiration of subsidies that are now sustaining sales.

But don’t you dare think about taxing the EVs’ pollution from mining the materials needed for the batteries, the pollution from manufacturing those batteries, or the pollution from disposing of those batteries when they’re spent.

Once again, if a company’s product is unable to compete in a free market without subsidies for their own products or artificial burdens—those internal protectionist tariffs—laid on competing products, the company’s product is not viable and not ready for market.

Full stop.

Facilitation

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Recall that the Progressive-Democrat-controlled Congress and President Joe Biden (D) enacted a $1.9 trillion Wuhan Virus Relief bill that contained a sliver of money for actual virus-related relief. The bill also included $12 billion in transfer payments for New York to “assist” that State with its budget.

This is what that bill and those $12 billion in transfers also facilitated.

The Democrat-controlled New York legislature has passed a budget deal that includes a $2.1 billion fund for illegal immigrants—including a one-time, $15,600 payment for those who lost their job during the pandemic.

Fully 17% of that Federal largesse—of average American‘ generosity—went to illegal aliens (whether us citizens agree with that or not). It’s plain that the State, at bottom, had no need for those $12 billion, since it has no need to spend the money on the citizens of New York.

Corporate Taxes

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Treasury Secretary and ex-Federal Reserve Chairman Janet Yellen opened her Wednesday Wall Street Journal op-ed with this:

When Congress enacted the Tax Cut and Jobs Act of 2017, the result was a dramatic reduction in corporate tax revenue. Over the past three years, corporate tax collections have fallen to their lowest level since World War II: 1% of gross domestic product.

Amazingly—shockingly—Yellen wrote that as if it were a Bad Thing.

Then she partially rationalized her disparagement with this:

Proponents of the TCJA said the US would get something in return for these tax cuts. Lower rates, the argument went, would lure production and investment to our shores, but that hasn’t happened—and for an obvious reason: other countries see what we’re doing and respond. When they see us lower our rates, they lower theirs to undercut us. In the end, no nation ends up more competitive. The result is a global race to the bottom….

Some of this is plain wrong. We did get trillions of dollars of corporate cash repatriated. We did get production and investment returned. And that spurred the outcome that Yellen so breathtakingly mistakes as a further Bad Thing. Other nations were spurred to compete on tax rates in order to retain their own businesses and to attract foreign investment.

Which drives the race to Yellen’s so-feared bottom.

But what is that bottom? Our Constitution specifies that the only things our Federal government is allowed, legitimately, to raise revenues for are three: to pay the Debts and provide for the common Defence and general Welfare of the United States. Those, with the general Welfare further specified by the remaining clauses of that Article I, Section 8, also, are the only things on which our Federal government may spend our taxpayer money. The other nations, particularly those competing with us on tax rates, have their own taxing (and spending) floors.

Racing to those bottoms may be bad for Government bureaucrats like Yellen, but they’re unalloyed Goods for the citizens of all of our nations, as we get to keep more of our money and make our own spending, saving, investing, and other allocating decisions with our money—and our decisions will be far better and far more efficiently done than any of our Governments can ever hope to do.

And at that natural bottom, nations can stop trying to compete on tax policy and focus on Adam Smith’s competition—providing better quality goods and services. Which is even better for us citizens, if not for the power of Government personages.

Only a Leftist or an entrenched bureaucrat can misunderstand that.