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Wisconsin: FoxCon Job

By dianeravitch
January 31, 2019 //
39

 

Robert Kuttner of the American Prospect reports about the con job in Wisconsin:

 

Kuttner on TAP

Fox Con Job. Remember Foxconn? Then-governor Scott Walker of Wisconsin lured the Chinese company to create “up to” 13,000 jobs in his state, with tax subsidies paid by Wisconsin taxpayers that could to as high as $3 billion. Foxconn was going to build a $10 billion factory complex to produce liquid crystal displays and other tech equipment that it now makes in Asia.

As the Prospect reported in an investigative piece last September, the taxpayer cost per new employee was estimated at $230,000, or five or six times the normal figure in such deals.

Though the 13,000 jobs were an estimate, not a formal commitment, President Trump touted that number at a ground-breaking ceremony last year with Walker, then-House Speaker Paul Ryan, and Foxconn CEO Terry Gou.

Well, that was then.

It now turns out that Foxconn will hire a maximum of 1,000 Wisconsinites, and is not building a factory at all. The company now describes its Wisconsin facility as an R&D center, combined with the possibility of some low-skill final assembly jobs.

There are several morals of this story. One, which we already knew, is never to trust Scott Walker or Donald Trump, either separately or together. Moral two is to keep your hand on your wallet whenever corporate execs hold you up for tax subsidies.

But the more important moral is that if the U.S. is to have a real industrial policy to reclaim U.S. manufacturing jobs, it is utter folly to rely on white knights on the form of Chinese companies. Making American manufacturing great again is not at the top of their national agenda.

Better to spend the money directly, on industrial strategies that benefit companies that are committed to producing in the U.S. It remains to be seen how much of the tax breaks were already squandered and what might be recouped. ~ ROBERT KUTTNER

The New York Times describes the same hoax in polite terms.

It was heralded a year and a half ago as the start of a Midwestern manufacturing renaissance: Foxconn, the Taiwanese electronics behemoth, would build a $10 billion Wisconsin plant to make flat-screen televisions, creating 13,000 jobs. President Trump later called the project “the eighth wonder of the world.”

Now that prospect looks less certain.

Pointing to “new realities” in the market, the company said Wednesday that it was reassessing the plans, underscoring the difficult economics of manufacturing in the United States. “The global market environment that existed when the project was first announced has changed,” Foxconn said in a statement.

Company officials had signaled for months that their emphasis was increasingly on research and development rather than large-scale production, dampening the potential for blue-collar job creation.

That turn runs counter to Mr. Trump’s vision for the project, which he had cited as a milestone in reversing the decline in factory jobs. The twist also brought new friction in Wisconsin, where the initiative has been politically fraught from the start because of its billions of dollars in tax subsidies.

Foxconn said that it remained committed to creating 13,000 jobs in Wisconsin and that it was “moving forward with plans to build an advanced manufacturing facility.” But it did not address the share of jobs to be devoted to production, and economists questioned how such a large work force could be created if the plant’s focus was on other areas.

A White House spokeswoman did not respond to a request for comment.

The Foxconn statement followed a Reuters report that Louis Woo, a special assistant to the company’s chairman, Terry Gou, had said the costs of manufacturing screens for televisions and other consumer products were too high in the United States.

“In terms of TV, we have no place in the U.S.,” Mr. Woo told Reuters. “We can’t compete.”

Mr. Trump’s campaign promise to revitalize American manufacturing was considered an important factor in his capturing Wisconsin and other battleground states in 2016. Yet the cost of luring Foxconn set off a partisan battle in Wisconsin that extended into the midterm elections last year, when Gov. Scott Walker, a Republican, was defeated.

Mr. Walker and state lawmakers had agreed to more than $4 billion in tax credits and other inducements over a 15-year period, an unusually high figure, for a plant in Mount Pleasant, near Racine.

Wisconsin residents have had mixed feelings about the investment, polls show. And early on, economists questioned whether the large-scale manufacturing plant and the thousands of jobs would come to fruition. The increasing focus on research raised new doubts about the scale of hiring — economists said that strategy could produce a smaller number of higher-paying jobs.

“There aren’t that many R&D facilities in the world with 13,000 people,” said Susan Helper, an economist at Case Western Reserve University in Cleveland

 

Categories Economy, Education Reform, Walker, Scott

Harold Meyerson: How AOC is Driving the Right Crazy and Making Democrats into Progressives

By dianeravitch
January 29, 2019 //
16

 

 

Harold Meyerson of The American Prospect writes about the unique power of the youngest freshman in Congress:

 

AOC’s Achievement: Making Americans’ Progressive Beliefs Politically Acceptable. Of all the reasons that Representative Alexandria Ocasio-Cortez is driving the right crazy, one of the most important is this: She’s advancing presumably radical ideas (by the right’s standards, anyway) that actually have massive public support.

Green New Deal? Fuzzy though its meanings may be, it brings together regional development policies for the huge region of the country that private capital has long since abandoned, climate change policies in a nation where climate-change apprehension is at an all-time high, full employment and decent wage policies for a nation where even voters in Republican states are casting ballots for higher wages and better jobs. Before AOC, whose radar was a Green New Deal even on? Since she joined the protestors in Nancy Pelosi’s office, a far-flung majority of Americans now see it as a way to address all manner of problems.

Likewise with taxing the rich. When AOC made the case for a 70 percent tax rate on annual income over the $10 million threshold, CNN’s Anderson Cooper responded as if she’d just called for collective farms. Now that Senator Elizabeth Warren is proposing a wealth tax that would compel the rich to pay an even fairer share of their bounty to support the common good, pundits are beginning to notice that the public has been supporting much higher taxes on the rich for a very long time. Since 2003, Gallup has annually asked the public whether they believe the level of taxes the rich pay is too high, too low or just right. The percentage saying “too low” has been in the 60-percent-to-70-percent range every year.

So it’s not hard to see why AOC is driving the right crazy. Forget the dancing, not to mention the racism and sexism that underpins many of the right’s complaints. It’s that she’s giving voice to progressive ideas that the public actually supports but that have long gone unvoiced by nearly everyone in power who has a megaphone they could use. She’s game-changingly brilliant at promoting progressive public policy. To the right, if I may steal from the Bard, such women are dangerous. ~ HAROLD MEYERSON

Categories Economy, Environment, Equity

Nancy Bailey: Arne Duncan Can’t Stop Peddling the Dangerous Corporate Reform Dogma

By dianeravitch
January 6, 2019 //
47

Nancy E. Bailey is turning into a superstar of education blogging. She is a retired teacher and she has a firm understanding of corporate reform and its dangers.

In this post, she reviews Arne Duncan’s stubborn embrace of dangerous corporate reform.

I will copy only a portion of the post. I urge you to read it all, because it is priceless as an evisceration of failed “reformer” ideas. You should also see her links, which are many.

She writes:

With Education Secretary Betsy DeVos, it might be tempting to see Arne Duncan as an educational expert, but Duncan has never formally studied education, or been a teacher. Duncan paved the way for DeVos.

EdSurge recently brought us Arne Duncan’s 6 lessons about education. They are nothing but the same old corporate reforms that have destroyed public schools and the futures of children for years.

The lessons are wrong.

Here are his claims and my anti-arguments.

He emphasizes early childhood education and the economy.

While there’s a school-to-work connection, especially with older students in high school, teaching young children should be about their development, not promoting the economy.

Too often this message results in pushing young children to work at a higher level than they’re capable.

The report of which Duncan refers is by James J. Heckman, a professor of economics at the University of Chicago. It highlights the economy and the nation’s workforce.

Here are the subheadings of the article.

*Early childhood development drives success in school and life.
*Investing in early childhood education for at-risk children is an effective strategy for reducing social costs.
*Investing in early childhood education is a cost-effective strategy for promoting economic growth.
*Make greater investments in young children to see greater returns in education, health and productivity.

His thoughts about equity are misleading.

Duncan argues that poor children need something different than what wealthy students find in their schools.

But poor children deserve well-run schools, with resources and qualified teachers, not strict charter schools run by management companies and novices.

Most charter schools care more about their bottom line.

Feeding poor children and health screenings should be a part of every school plan.

If Duncan cared so much about grief and trauma in children, why didn’t we see an increase in counselors, school nurses, and school psychologists under his watch?

He claims class sizes don’t matter.

This has been the refrain by reformers like Bill Gates for years and it is false.

Here’s the STAR study as one example in favor of lowering class size.

Lowering class sizes would help teachers have better overall classroom management.

Students would be safer, and children would get a better grasp of reading and other subjects in the early years.

He says teachers matter more than class size.

Real teacher qualifications matter. But that’s not what Duncan is talking about.

He is promoting the faulty idea that a “good” teacher can manage huge class sizes. Of course, this makes no sense.

This is also connected in a roundabout way to replacing teachers with technology. Imagine one teacher teaching thousands online.

Duncan has always been on the side of Teach for America fast-track trained teachers. Consider that they will likely become charter school facilitators, babysitters, when students face screens for their schooling.

He uses teachers as the fix for poverty.

This is an old and dangerous refrain. This message drove No Child Left Behind and Race to the Top. It made standardized testing and one-size-fits all common practice.

Teachers can help students, but economic forces are greater than anything a child can learn at school.

Blaming teachers for the problems in the economy, has always been about getting the public to take their eyes off the real culprit of economic woes, the greed of those who run corporations!

Please read on. This is a great post!

Categories Charter Schools, Childhood, Class size, Corporate Reformers, Duncan, Arne, Economy, Education Industry, Poverty, Privatization, Teachers, Testing

The Greedy, Selfish Billionaires Who Rig Taxes in Washington State

By dianeravitch
January 2, 2019 //
68

Hanna Brooks Olsen writes here about the billionaires of Washington State and their clever strategies to stay very rich whileappearing to be philanthropists.

They give to the poor. They give toworking people. They give to the homeless.

But they make sure that Washington State has the most regressive Taxes in the nation, which protects their fortunes.

Because when billionaires do anything for anyone else, it’s cause for celebration.

We see this a lot out here in Washington state, a place that is uncommonly kind to people with ample wealth. This is not hyperbole; a report released in October found that, once again, the Evergreen State has the country’s most regressive tax structure. The richest percentile of residents — those who earn more than half a million dollars annually — pay three percent of their income in annual state and local taxes. Meanwhile, those who earn under $24,000 per year — many of whom live below the poverty line — shell out 17.8 percent.

This makes it difficult for lawmakers to tackle the big problems; for over a decade, Washington has struggled to fund basic education and provide critical mental health care to those in need. Every year, elected officials head into session wondering how they’re going to pay for new roads and transportation upgrades when property taxes are maxed out.

But this structure is not an accident. It is by design, crafted and upheld by the people it benefits. Washington state is home to a tax structure that benefits the wealthy because, and not in spite of, the fact that Washington state is also home to the nation’s wealthiest men.

And yet, those same wealthy men — and everyone who carries water for them — will tell you that they are doing everything they can and that anything we receive from them, collectively, should be praised.

Washington is proud of its billionaire population, and many people work hard to retain them; after Amazon announced that it was seeking a second (or, now, a second and third) location, lawmakers penned op-eds decrying Seattle’s “anti-business” climate as the reason the online vending behemoth might want to explore other options and made substantial political offers to try to get them to keep growing at break-neck pace. After all, these billionaires give money. They’re philanthropists. We would be sunk without them.

And yet, the same men — men like Bezos and the late Microsoft co-founder Paul Allen — who receive awards and accolades for their community involvement, for their substantial role in Washington’s booming economy, are also the ones who have piled cash reserves while the state government starved. Washington needs this philanthropy precisely because the wealthy don’t pay taxes.
The bar for the behavior of billionaires feels precariously low.

If you know just one single thing about Paul Allen, it’s probably that he had a lot of money and that he gave away a lot of money. Throughout his life, he donated about $2 billion to charitable causes and organizations he founded. But he also spent a lot of money, mostly quietly, to keep his money.
According to MIT researchers, more than 46 percent of Americans die with less than $10,000 to their name.

Just a few weeks before his death, Allen made headlines for donating $100,000 to a political action committee designed to retain Republican control of the House. He also, in the last several years, made substantial donations to Republican candidates, the majority of whom have backed the Trump administration’s tax plan. And the year he made headlines for joining the “Giving Pledge” to donate 10 percent of his income, he also donated heartily to defeat an initiative that would have created an income tax in Washington. That initiative—to increase taxes on the rich—was led by another billionaire, the father of his one-time business partner, Bill Gates Sr.

It worked. The campaign was defeated, and, to this day, Washington state has no income tax, no capital gains tax, and gaping loopholes for things that rich people buy, like jet planes. The bulk of tax money in Washington comes from sales taxes, property taxes, and a business tax that is woefully regressive, particularly to small businesses.

As such, our billionaires keep getting richer. At his death, Allen was worth an estimated $26 billion — an astronomical amount in a nation where, according to MIT researchers, more than 46 percent of Americans die with less than $10,000 to their name, and most have less than $1,000 in savings. Allen owned two yachts, one of which cost $100 million.

Categories Accountability, Billionaires, Economy

Harold Meyerson: Republican Voters Approve Hiking Minimum Wage, Republican Legislators Reject Them31

By dianeravitch
December 26, 2018 //
7

Harold Meyerson of “The American Prospect” tells the story of Republican perfidy in overturning the will of the voters regarding minimum wage.

Republican voters approve minimum wage hikes; Republican legislators overturn them.

On Election Day earlier this month, Arkansas voters went to the polls and approved a ballot measure to raise the minimum wage. It wasn’t close: 68 percent of them voted Yes. Just to their north, in Missouri, voters also approved a minimum wage hike, with 62 percent of them voting Yes.

Though Arkansas and Missouri are among the reddest of states, these results shouldn’t surprise anyone. Every ballot measure to hike a state’s minimum wage over the past few decades has been approved. Indeed, the only group of Americans dead set against such raises appears to be Republican legislators.

On Wednesday, demonstrating just how removed those legislators are from the concerns of the American people, Republicans in the Michigan state senate voted to gut a minimum wage increase they had approved before the November elections—in a way that allowed them to rescind their approval once the elections had safely been dispensed with.

Earlier this year, progressive activists had gathered more than the required number of signatures to place a measure on November’s ballot that would have raised the state minimum wage to $12 by 2022, and the tipped worker minimum to $12 as well, but phasing it in more slowly. At that point, Republicans in the legislature intervened to enact a law identical to the ballot measure, but with the proviso that they could amend that law later this year. By so doing, they knocked the measure off the ballot. Had it remained on the ballot and been passed, as it surely would have been, it would have required the votes of three-quarters of the legislators to amend it. By passing it as a law, however, the Republicans ensured that it could be amended by a simple majority vote.

And on Wednesday, the simple, if devious, Republican majority in the state senate amended the law. In place of the stipulation that the minimum be raised to $12 by 2022, the Republicans pushed that back to 2030. The minimum for tipped workers was scaled back from $12 to $4, with that figure not to kick in until 2030 as well. The measure now goes to the House, where the Republican majority is expected to follow the Senate’s lead and send it to the desk of Republican Governor Rick Snyder, of Flint-deadly-water fame. The reason for this unseemly haste is that come the new year, a Democrat, Gretchen Whitmer, will succeed Snyder as governor, and she’s made clear there’s no way she’d sign such changes into law.

Michigan voters swept Democrats (all of them women) into every major statewide office in November’s voting; Republicans narrowly retained their state legislative majorities through the grace of gerrymandering. With Whitmer as governor, they won’t be able to carve such sweet-deal districts for themselves in the post-census redistricting, but for now, their gerrymandered moats and gerrymandered minds insulate them from the concerns and desires of their fellow Americans. ~ HAROLD MEYERSON

Categories Economy

Harold Meyerson: Corporate America’s Highest Priority: Rewarding the Rich

By dianeravitch
December 19, 2018 //
12

A reminder of why workers need unions. To reduce inequality. To give working people a voice. To establish a modicum of balance between haves and have-nots. To temper the greed of the wealthy.

From The American Prospect:

Meyerson on TAP

Corporate America’s Only Priority: Rewarding the Rich. The stock market may be tanking, but investors—make that, major investors—are doing great nonetheless.

How, you may ask, is this possible? It’s because corporations have showered them with heretofore unimaginable dividends and share buybacks.

According to a front-page story in Monday’s Wall Street Journal, “companies in the S&P 500 have spent nearly $421 billion on dividends through November,” which is more than they spent on dividends in all of 2017. And this doesn’t take into account the amount of money corporations are devoting to share buybacks, which is more than twice the amount they’ve shoveled into dividends this year. Indeed, both dividends and share buybacks have already broken their all-time yearly record—and the Journal predicts that next year’s levels will surpass this year’s, notwithstanding the downward direction of the market.

In recent months, both wages and domestic capital investment have inched up, but at nowhere near the level of the increase in the return to shareholders. As the terrific new study by Josh Bivens and Heidi Shierholz of the Economic Policy Institute makes clear, the single most important factor in the past-four-decades’ diversion of business income from workers to shareholders and executives is the success of business’s assault on worker power, and the concomitant success of business’s insistence that government favor the rich over everyone else.

The last time I looked, the theory behind the government’s decision to tax capital gains at a lower rate than income from work was that investors bolstered the economy by investing. Now that corporation’s main mission is to reward investors at the expense of all other conceivable ways to spend its revenues, however, the capital gains tax has become purely a way to reward investors for extracting money from corporations, for siphoning funds from what otherwise might be productive enterprise.

Nice work if you can get it. ~ HAROLD MEYERSON

Categories Economy

Seth Sandronsky: How Corporate Tax Breaks Defund Public Schools

By dianeravitch
December 19, 2018 //
17

Today, as cities compete to lure multi-billion dollarcorporations woth tax breaks, its time to reflect on the true costs of these tax breaks and incentives.

Seth Sandronsky, a California-based investigative journalist, digs down and finds that public schools pay the bill.

“Public schools are losing. Private interests are winning. Here are the numbers. US public schools lost a total of $1.8 billion due to economic development tax incentives for corporations in 2017, according to a new report from Good Jobs First, a watchdog group in Washington, D.C. (goodjobsfirst.org/newmath).

“In this case, the term economic development conceals more than it reveals. At the end of the day, who wins and who loses when governments shift public tax dollars to corporate pockets comes into sharper focus with Good Jobs First unpacking the financial reports of 5,600 of America’s 13,500 independent public school districts across 28 states.

“Did somebody say the miracle of the marketplace? Well, government hands are all over this story, contrary to nonsense about the efficiency of market forces. The recent announcement of Amazon receiving billions of public tax dollars for its “HQ2” is a case in point.”

Categories Economy

Despite Full Employment and Big Corporate Tax Cut, Most Workers Got No Pay Raise

By dianeravitch
December 16, 2018 //
37

The rising tide was supposed to lift all boats. It didn’t.

Corporations and very rich individuals got a big tax break a year ago. The unemployment rate is very low.

But most workers did not get a raise.

In education, many teachers have not see a raise for years.

It seems that all the benefits of economic growth have gone to the wealthiest.

One reason: The decline of unions.

When corporations have a great year, unions fight for higher wages.

In the absence of unions, workers have no voice.

Categories Economy, Unions

“American Capitalism Isn’t Working”

By dianeravitch
December 7, 2018 //
80

David Leonhardt, columnist for the New York Times, explains his conviction that American capitalism isn’t working. It’s puzzling that someone who is so clear-sighted about the economy and the damage done by rapacious corporate greed is so bamboozled by charter school mythology.

He wrote:

The October 1944 edition of Fortune magazine carried an article by a corporate executive that makes for amazing reading today. It was written by William B. Benton — a co-founder of the Benton & Bowles ad agency — and an editor’s note explained that Benton was speaking not just for himself but on behalf of a major corporate lobbying group. The article then laid out a vision for American prosperity after World War II.

At the time, almost nobody took postwar prosperity for granted. The world had just endured 15 years of depression and war. Many Americans were worried that the end of wartime production, combined with the return of job-seeking soldiers, would plunge the economy into a new slump.

“Today victory is our purpose,” Benton wrote. “Tomorrow our goal will be jobs, peacetime production, high living standards and opportunity.” That goal, he wrote, depended on American businesses accepting “necessary and appropriate government regulation,” as well as labor unions. It depended on companies not earning their profits “at the expense of the welfare of the community.” It depended on rising wages.

These leftist-sounding ideas weren’t based on altruism. The Great Depression and the rise of European fascism had scared American executives. Many had come to believe that unrestrained capitalism was dangerous — to everyone. The headline on Benton’s article was, “The Economics of a Free Society.”

In the years that followed, corporate America largely followed this prescription. Not every executive did, of course, and management and labor still had bitter disputes. But most executives behaved as if they cared about their workers and communities. C.E.O.s accepted pay packages that today look like a pittance. Middle-class incomes rose faster in the 1950s and 1960s than incomes at the top. Imagine that: declining income inequality.

And the economy — and American business — boomed during this period, just as Benton and his fellow chieftains had predicted.

Things began to change in the 1970s. Facing more global competition and higher energy prices, and with Great Depression memories fading, executives became more aggressive. They decided that their sole mission was maximizing shareholder value. They fought for deregulation, reduced taxes, union-free workplaces, lower wages and much, much higher pay for themselves. They justified it all with promises of a wonderful new economic boom. That boom never arrived.

Even when economic growth has been decent, as it is now, most of the bounty has flowed to the top. Median weekly earnings have grown a miserly 0.1 percent a year since 1979. The typical American family today has a lower net worth than the typical family did 20 years ago. Life expectancy, shockingly, has fallen this decade.

The great stagnation of living standards is a defining problem of our time. Most families do not enjoy the “rapidly rising level of living” that Benton called for. Understandably, many Americans are anxious and angry.

The solution will need to involve a return to higher taxes on the rich. But it’s also worth thinking about pre-tax incomes — and specifically what goes on inside corporations. It’s worth asking the question that Benton asked: What kind of corporate America does the rest of America need?

Elizabeth Warren, the Massachusetts senator, is now rolling out a platform for her almost-certain presidential campaign, and it includes an answer to this question. It is a fascinating one, because it differs from the usual Democratic agenda of progressive taxes and bigger social programs (which Warren also supports). Her idea is the most intriguing policy idea to come out of the early 2020 campaign.

Warren wants an economy in which companies again invest in their workers and communities. Yet she doesn’t believe it can happen organically, as it did in the 1940s, because financial markets will punish well-meaning executives who stop trying to maximize short-term profits. “They can’t go back,” she told me recently. “You have to do it with a rule.”

She has proposed a bill in the Senate — and Ben Ray Luján, a top House Democrat, will soon offer it there — that would require corporate boards to take into account the interests of customers, employees and communities. To make sure that happens, 40 percent of a company’s board seats would be elected by employees. Germany uses a version of this “shared-governance” model, mostly successfully. Even in today’s hypercompetitive economy, German corporations earn nice profits with a philosophy that looks more like William Benton’s than Gordon Gekko’s.

Is Warren’s plan the best way to rein in corporate greed? I’m not yet sure. I want to see politicians and experts hash out her idea and others — much as they hashed out health care policy in the 2008 campaign.

But I do know this: American capitalism isn’t working right now. If Benton and his fellow postwar executives returned with the same ideas today, they would be branded as socialists. In truth, they were the capitalists who cared enough about the system to save it. The same goes for the new reformers.

Categories Accountability, Economy, Inequality

In Trump’s America, We Shoot Tear Gas at Mothers and Babies in Diapers

By dianeravitch
November 26, 2018 //
76

What is happening on the southern border is appalling. Trump has given the order to the Border Patrol to use lethal force, if necessary.

At this moment, the Border Patrol is using tear gas against families, and the news is full of photographs of mothers with their babies in diapers fleeing from the tear gas.

Welcome to Trump’s America!

FOX News calls this a “battle for the southern border.” Really? A battle between a bunch of bedraggled migrant families and our military? Oh, and FOX forgot to mention the federal report warning about a likely climate catastrophe in the not distant future. FOX was too obsessed with the “battle for the southern border” to give time to the climate change report from the Trump administration, which was strategically released on Friday at 2 pm in the midst of the Thanksgiving weekend in the hope that no one would notice it.

And another milestone in the era of MAGA: GM announced it is closing 5 of its American plants and laying off 10,000 workers. I wonder if they will get a Christmas bonus or even a card?

Categories Cruelty, Economy, Environment
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