Bruce Murphy
Murphy’s Law

Paper Peddles Bogus Foxconn Report

Puffed-up report by Walker crony swallowed whole by Journal Sentinel.

By - Aug 23rd, 2017 01:54 pm
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Foxconn chairman Terry Gou and Governor Scott Walker signing a memorandum of understanding. Photo by Jeramey Jannene.

Foxconn chairman Terry Gou and Governor Scott Walker signing a memorandum of understanding. Photo by Jeramey Jannene.

Yesterday was a low moment for the Milwaukee Journal Sentinel.

The newspaper’s front page story touted a new report concluding the state could get “a return of $3.90 for every $1 in state subsidy costs spent to lure Foxconn” to Wisconsin. The problems with the report are many, but let’s begin with the elephant in the room. The author of the “evaluation,” as he describes it, is UW-Madison economist Noah Williams, a fan of Gov. Scott Walker who sought a job with the governor as a campaign advisor and who previously issued a study of the impact of the Agriculture and Manufacturing Tax Credit that was quickly discredited.

Yet the Journal Sentinel story, whose headline announces that “Foxconn could return nearly $4 for every $1 in state subsidy,” never mentioned any of this baggage. It’s an incredible omission, and behind that is a story of how the media works (or doesn’t) and the unseemly haste to pass the multi-billion Foxconn deal before the problems with it are understood by the public.

For starters, the report was commissioned by the Wisconsin Technology Council, which has been an aggressive champion of the Foxconn deal. The group’s president Tom Still, who served for 11 years as associate editor of the Wisconsin State Journal, writes a weekly column for the Journal Sentinel. Still wrote an Op Ed saying the state should be happy just to be considered by Foxconn, set the stage for Foxconn getting a good deal by noting other states may dig deeper into their pockets than Wisconsin, reported all the officials and politicians who support the deal and none of the opponents, and has been quoted saying the $3 billion subsidy is still a good deal if Foxconn creates only 10,000 jobs rather than the 13,000 that’s been touted.  The media frequently quotes Still as an expert on the Foxconn deal without ever noting his group is an unabashed supporter.

So when the Technology Council looked for an economist to do a quick report on the Foxconn deal, it’s safe to assume they wanted someone who would be sympathetic to the deal. Even by that standard, however, the group’s choice is egregious.

Noah Williams served as an advisor to Scott Walker’s presidential campaign, as an Associated Press story by Scott Bauer and a Forbes magazine story have noted. Williams connected to Walker after aggressively selling himself to the governor, as university emails reviewed by One Wisconsin Now documented in a press release published by Urban Milwaukee. The Journal Sentinel never reported any of this.

Williams went on to write a glowing study of Walker’s Agriculture and Manufacturing Credit, which claimed it resulted in 20,000 new jobs. The study was dismissed in an analysis by our Data Wonk columnist Bruce Thompson, who noted, among other problems, that Williams study of contiguous counties in Wisconsin and four other Midwest states paired counties that are completely unlike in gross domestic product per capita without ever accounting for the difference.

Williams, in short, is an unabashed supporter of Walker, as suggested by the title of his Op Ed for Forbes, “Under Scott Walker, Wisconsin Has Prospered–Keep That In Mind For 2016.” Still, however, says he wasn’t aware of Williams background. He adds that Williams did the report for no pay because Williams and his Center for Research On the Wisconsin Economy are members of the Wisconsin Technology Council and Williams was “was following the issue, anyway, and produced the evaluation.” None of which lends confidence that this would be an objective assessment.

As for the Journal Sentinel, all a reporter would have to do is google “Noah Williams and Scott Walker” and the Associated Press story and Urban Milwaukee press release pop up on the first page. But the Journal Sentinel reporters apparently didn’t bother (the ever-shrinking newspaper still seems to operate as though it’s the only media in the state), nor did they report that the WTC is a cheerleader for the Foxconn deal.

As for Williams’ report, it offers about seven pages of analysis and immediately tips us off that this is hardly a significant study, calling itself an “evaluation” and noting its conclusions “are limited by time.”

Williams at first inflated the number of jobs spun off by the deal by 13,000, as he admitted to the Journal Sentinel. Even after the figure was corrected, Williams comes up with an even bigger economic impact from the Foxconn deal than the company, EY, hired by Foxconn to provide the best-case analysis. The non-partisan Legislative Fiscal Bureau has cautioned that the EY data on the spin-off jobs is “speculative,” but Williams ups the estimate even further.

Williams asserts that Foxconn will assuredly be creating far more than the minimum 3,000 jobs because its capital investment of $10 billion is so high, but ignores the fact the deal offers no assurance Foxconn will actually invest the $10 billion and no penalty if it doesn’t. Similarly he notes that Foxconn plans to run the plan longer than 15 years, thus increasing the value of the deal, without noting there is no guarantee this will happen or penalty if it doesn’t.

Finally, Williams disputes the Fiscal Bureau prediction that 10 percent of jobs could be filled by Illinois residents because, he notes, there is currently a net outflow of Wisconsin workers to Illinois jobs. But this gross data tells us nothing about the specific skill sets required for the Foxconn jobs and whether enough of those workers can be found in Wisconsin.

All told the evaluation is weak at best, and hardly worth reporting given Williams’ massive conflict of interest, much less being heralded on the front page. The JS story was published at 5:48 p.m. on Monday and ran in print the next morning. Some time on Tuesday afternoon, the story made a change, presumably after hearing from Scot Ross of One Wisconsin Now, and added a graph noting that Williams “had sought to advise Walker on his unsuccessful presidential campaign.” The paper added this fact: “Williams also contributed $500 to Walker’s campaign, federal records show.”

Of course by that time most online readers had read the story without the additional information. As for print readers, the next day’s paper offered none of the information on Williams‘ conflicts. So far as those readers are concerned, a UW-Madison economist had concluded the Foxconn deal was the greatest thing since sliced bread.

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More about the Foxconn Facility

36 thoughts on “Murphy’s Law: Paper Peddles Bogus Foxconn Report”

  1. Henry Jorgenson says:

    I got a letter from “the ever shrinking newspaper” today telling me my 7 day subscription rate is going up 25% Sept. 1. $36 to $50/ month. Plus tax. Just changed to 2 days a week. Which is what they should do. They’ve turned into a charity.

  2. lufthase says:

    Isn’t the bigger issue that Williams invents a whole new definition of “RETURN”?
    …so WIGOP politicians can tweet out the “$4 Return for every $1” headline, often without even linking to the JS article

    Looks like he’s saying over 15yrs Foxconn (@13,000 jobs) might have a total payroll of $11B
    So, $11B payroll / $2.84B incentive = $3.90 “Return” for every $1 of incentive
    (The report is very sloppy, and probably wouldn’t pass muster if turned in by an undergrad, so I could have misread something.)

    Since when does Total Payroll over 15yrs equate to a “return” on taxpayer-funded incentives?
    Up till now all the coverage has defined “Return” as taxpayers being made whole. That is, new tax revenue from Foxconn equaling or exceeding the taxpayer-funded incentives on the frontend.
    And even with this newfangled definition of “Return,” aren’t there other ways to spend $3B that would result in much more than $11B in total payroll?
    (Gets back to the whole cult of “Trickle-Down” that if we throw enough taxcuts and corporate welfare at big business, they promise that we’ll to end up with increased total tax revenue for schools, etc… Williams seems to abandon the whole increased revenue thing. Can we take that to mean elected GOPs are giving up on that argument too?)

  3. I agree with the author. I even sensed from the too-good-to-be-true headline on the Journal Sentinel account that the study was questionable. It took no more than a few sentences of reading to confirm my suspicions.

  4. Vincent Hanna says:

    As soon as I saw that the study was conducted by a UW-Madison professor, I knew it was Noah Williams. I read the story and kept reading for some mention of the fact that he is closely tied to Walker and has vocally supported Walker over the years. I mean the Journal Sentinel has reported this many times in the past. You can find several stories where they mention Williams supporting Walker. It’s just breathtakingly irresponsible journalism. And people still believe the JS is liberal? They must not actually read it.

  5. AG says:

    I don’t automatically discount Bruce Thompson’s articles just because he signed the recall petition and donated to a democrat member of the Wisconsin State Assembly. How about more discussion of the merits of what is said?

    So if Noah Williams is biased, show me how the bias comes through in the report.

  6. Vincent Hanna says:

    One Bruce mentions problems with the study and two a huge issue here (that you don’t mention) is the fact that the print edition of the story makes no mention whatsoever of Williams close ties to Walker.

  7. NoGo says:

    The UW Madison school allows someone on campus who likes scott walker??? I assumed every faculty member has to wipe their feet on a picture of walker each day. Which republican supporter did doyle get to write his proposals on high speed rail? Or what republican supporter did doyle get to write about all the jobs that Spanish company would bring to Milwaukee to build rail cars?? Oh wait that’s a democrat. I forgot. Mr. Murphy trusts whatever a democrat says without question. Lets be clear. Democrats don’t want this period. The only reason the few democrats on the assembly voted for the Foxconn proposal is because they would have to explain why they don’t want their constituents to have the jobs. Otherwise its all about politics. Beating Walker in 2018 while he stands at the Foxconn construction site taking pictures just got that much harder for democrats expecting this was going to be an easy win.

  8. AG says:

    Bruce, your few criticisms presented here about the actual report are pretty weak.

    1. The error in the abstract was literally typographical or copied wrong. It has no affect on the information in the report itself.

    2. Williams explains why the 3,000 jobs w/ a $10 billion dollar estimate is highly unlikely and why we’d more likely see many more hired if they invested that much. Even if Foxconn does indeed invest less than $10 billion, that would be a “good” thing in terms of the cost per job that the articles on Urban Milwaukee keep taking exception to.

    3. Williams also goes on to extensively explain why his job multiplier varies from the EY report. And of course it is speculative… all these reports are speculative. That’s all anything is until it actually happens.

    4. It’s interesting that he can’t make mention that the plant is planned to stick around longer than 15 years (which wasn’t even included in his data, it was merely a mention) but UM and other anti-Foxconn people can make all sorts of negative assumptions about the project.

    5. Finally, Williams made the exact same observation mentioned in this article that nothing is certain. This pertains directly to your comment that he made regarding the number of jobs induced and filled by only WI workers. He specifically says his data only applies when making the assumption that this new high tech manufacturing creates a new skilled workforce that will attract similar companies. Those workers don’t exist in IL either. So the skill of the worker in WI or IL is not relevant.

  9. Duane Snyder says:

    The Foxconn corporate welfare program coupled with Paul Ryan’s new “we need to cut taxes so we can bring back jobs” commercials are making my head hurt. When will the white middle class worker acknowledge that the Republican Party is playing them for a fool?

  10. Chaz says:

    Using the UW-Madison name for credibility via a conservative ideological professor which, if I’m to believe the conservative noise machine, is an anomaly for this and most institutions of higher learning. Makes me wonder if years from now when the WisGOP and the Koch’s have turned this once great institution into a school for conservative fluff-fiction, will they still be able to rely on the UW’s reputation as fertile soil of scientific authority? Or will it end up like the water table of the central sands, the sandstone hills of the driftless, or the clean(ish) cold waters of our connected great lakes – polluted, extracted, and carted off. I hope for neither and thus I hope for miracles.

  11. Vincent Hanna says:

    If a Doyle donor and friend released a study that made him look good conservatives would lose their damn minds. If the paper failed to mention that the individual conducting the study was a Doyle donor/friend conservative heads would explode all over the state.

  12. Bruce’s criticism of the report is deeper than its apparent biased sources. It’s simply pie in sky. Financial details are total guesswork at this point by any side. As someone who has been pursuing more knowledge about Foxconn’s plans, I am amazed that the state hasn’t addressed in reality the environmental impact and the breakdown of what sort of jobs are being discussed whatever their numbers. Sophistical high tech skill jobs were not what has driven Foxconn’s growth or past plants, and there is no factual justification for calling it, as Walker’s people do, a new eco-system for Wisconsin.

  13. daniel golden says:

    Noah Williams is to honest economics as creationists are to earth sciences. His op-ed in the Wisconsin State Journal pro porting to show that the GOP elimination of the taxes on manufacturing and agricultural was successful, was a laughable contrivance. It was based on comparing a few counties in Wisconsin with a few counties in Illinois as to industrial job growth since the tax on manufacturing was eliminated. The only problem with the analysis was the fact that the tax break was effective for all of Wisconsin, and all of Wisconsin was last in the Midwest in industrial job growth during the survey period. It was whore research normally generated by outfits such as The Heartland Institute. The bigger question is what is a dogma driven shill for the GOP doing as a professor on a college campus. Generating right wing puff pieces may make the Wisconsin Manufactures and Commerce happy, but in its lack of intellectual honesty, it diminishes the entire University. .

  14. Bill Kurtz says:

    Excellent analysis. Let me offer another example of strange goings-on at the JS covering this topic. On Sunday, there was a front-page story (overdue in my opinion) on what happened in Harvard, Ill., just south of the state line. Illinois outbid Wisconsin to land a Motorola cellphone manufacturing plant in the mid-90s. (The numbers were quaint by comparison, $30 million to get 5,000 jobs.) Less than seven years later, the plant closed and has been vacant ever since. But before the Harvard facts were laid out, there were several introductory paragraphs about auto plants in southern states. Talk about burying the lead! It’s not like there was a need for yet another reference to possible upside, before the contrarian facts were introduced.

  15. Paul Trotter says:

    “If the Taiwan-based electronics manufacturer employs 13,000 people in the state, the ripple effect could spawn an additional 19,000 to 26,000 jobs through growth from the company’s suppliers and other businesses in the region, said Noah Williams, director of the Center for Research on the Wisconsin Economy.”

    “If”, “could” – all words used by Williams. Given that Foxconn is going to get all their parts for assembly from Taiwan 19k or even 13k jobs is pie in the sky rose colored glasses speculating by the wanna be in the Walker administration economics professor. One has to wonder how Foxconn is going to make a profit after the Walker corporate welfare subsidies dry up. And if they do where will they go? To the next gullible I want to get reeelected and play run for president governor who doesn’t give a damn about this state and only has his own self interests in mind?

  16. Paul Trotter says:

    Wirch said an interesting thing on PR the other day. When asked if any Republicons would vote no his response was in so many words – they will vote yes because that don’t want to embarrass their Governor? We have spineless lawmakers.

  17. Wisconsin Conservative Dgiest says:

    Bruce, cancel your subscription!! Since you left nothing works down there any more.

  18. Wisconsin Conservative Dgiest says:

    Bruce, Kurtz; Please keep this up. we love you. Every night we get together in the bar, Conservatives, leaders and celebrate Fox conn, most important thing to happen since the Left/Earl drove out KC>

  19. Paul Trotter says:

    Digest – So you hammer them down every night? Madison Club? No wonder your judgement is impaired and can’t see beyond the Con job right in front of your noses. Scott Walker and Foxconn are taking all of you for a happy ride to Kansas. Drink up fools – you’ll need it.

  20. Observer says:

    Oh Paul, he just loves paying higher taxes, silly.

  21. Observer says:

    Bob. Did you mean to say that you get together at the bar with conservatives, leaders, and celibate Foxconn? I guess that will change once they %$#@ us.

  22. Thomas says:

    NOGo (post # 8) goes nowhere because he is upside-down. Doyle’s enthusiasm for the fast train was a continuation of Tommy Thompson’s desire for same. WI would have received federal funds for that train. WI tax payers will have to shell out for Foxcon.

    NoGo’s assumption that there are no conservatives or reactionaries at UW-Madison suggests that NoGo is more familiar with right wing talk radio than our flagship state U. Liberals are prominent at UW-Madison because they read. Reading is valued at universities. Reactionaries have no time for reading because they devote too much time to right wing radio and Fox News on TV.

  23. Wisconsin Conservative Dgiest says:

    Halfast trains are disaster all round the world and in Wisconsin they are not needed. We travel by car, truck and plane. Trains have never done well here except in the 1800’s.
    California is mortgaging their future to that nutty deal and it will not fulfill what they need.

  24. Wisconsin Conservative Dgiest says:

    Paul, last night I had three kiddy cocktails

  25. Observer says:

    Mr. Dohnal, can I catch a ride to Minneapolis in your truck? If it’s full, can I ride in your plane? I’ll get some 7-Up and maraschino cherries.

  26. tim haering says:

    Bruce, seems to me you naysayers are also “puffed-up.” I think the mighty blue Tick had good advice for Foxconn supporters and opponents: “Don’t count your weasels before they’ve popped, dink!”

  27. Paul Trotter says:

    Digiest – how’d that go down with your fellow Repbulicans?

  28. Wisconsin Conservative Dgiest says:

    we are the leaders.

  29. old baldy says:

    wcd:

    “Trains have never done well here except in the 1800’s.”

    History isn’t your strong suite, eh??

  30. Paul Trotter says:

    WCD: Kiddie Cocktails all around -here’s a toast to the kiddos in the room.

  31. Wisconsin Conservative Dgiest says:

    I am really upset about this report. i worked 25 minutes on it. I am insulted.

  32. Observer says:

    The Journal Sentinel comes up with a doozy of a headline tailor made for Wisconsin Conservative Digest: Wisconsin Foxconn deal could mean higher taxes for local homeowners
    http://www.jsonline.com/story/news/politics/2017/08/28/without-fix-wisconsin-foxconn-deal-could-mean-higher-taxes-local-homeowners/601093001/
    Boy Bob Dohnal, that sure is a white crowd at your house. You know, Wauwatosa is no longer a sunset town so you could have had one of your many black (or brown) friends stop in for a photo op. Or even a tenant. trump’s Arizona token black camera hog is still for hire I’m told. Nice Chinese made hat too! http://www.jsonline.com/picture-gallery/news/2017/08/27/photos-conservatives-gather-at-chicken-burn-with-senate-candidates/105036166/

  33. Vincent Hanna says:

    I wonder if everyone at that party called Barrett, Abele, Doyle, MPS employees, and anyone left-of-hard-right a racist who hates poor kids and people of color, just like WCD is always doing here.

  34. Wisconsin Conservative Dgiest says:

    Milwaukee has enormous problems which we have itemized here for decades and argued with Bruce. After decades things are worse. So those that have an interest beyond talking points, and their own skins might wan too ask why the schools: “National Disgrace”, crime car jackings, murders, human trafficking and the rest never get better.
    No one on this site seems to have any answers while Frankovis, Clarke, myself, Scott, Alberta all have answers that never get done cause the Left, that runs Milwaukee, top ten worst run cities in country get worse.
    That is either incompetence, negligence, stupidity or no one wants to do anyhting as long as they keep power.

  35. Observer says:

    Why things don’t get better? Glenn Frankovis, David Clarke, Glenn Grothman, Bob & Jean, Scott Walker, Joel Kleefisch, The Fitzgerald brothers, Duey Stroebel,, and Alberta Dahling (sic) to name but a few.

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