The Governor of Giveaways
Instead of building a real economy, Walker is trying to buy one.
On the night he was elected governor in November 2010, Scott Walker’s one simple phrase was a call to action: “Wisconsin is open for business!”
Walker had run on a pledge to bring 250,000 new jobs to Wisconsin by the end of his first term as governor, and the expectation was that we’d see a classic Republican approach: get out of the way of business and let the private sector drive the economy, while spending more on transportation, specifically highways, than his predecessor, Democrat Jim Doyle.
Instead, Walker is using government to build the economy, and on a scale that has never been equaled in Wisconsin history. No governor in state history, Republican or Democrat, has come close to spending so much in taxpayer dollars to subsidize one business, with the total handout for Foxconn now at nearly $4.1 billion. In fact, no government in America has ever spent this much money to subsidize development by a foreign business.
Under Walker, it’s almost as though the private sector can no longer function without government handouts. The state handed out subsidies to 59 companies in 2017 alone.
Doyle, Thompson and past governors spent strategically, when nothing else would assure a company would remain in the state. Walker hands out subsidies like candy. The latest example is Kimberly-Clark, which will be offered the same obscene amount per job as Foxconn by Walker and Republican legislators, and which has become the new standard for future corporate handouts.
And yet there is no evidence all this largesse is improving the state’s economy or giving Wisconsinites jobs they wouldn’t have otherwise gotten. Nationally, the post-2010 economic recovery has resulted in tremendous growth in jobs, but Wisconsin has consistently lagged behind most states.
The state is also bleeding population which has left Walker spending $7 million to market Foxconn to out-of-state workers. Yes, taxpayers are paying $4.1 billion for a company that will have to bring in workers commuting from Illinois. As for Kimberly-Clark, experts suggested the laid-off workers could be employed elsewhere.
Walker’s entire approach of massive subsidies has yet to prove it has had any impact. The huge $457 million tax break given by Republicans to manufacturing companies has resulted in little increase in employment.
As widespread as his subsidies have been, they have concentrated on manufacturing, which represents only 16 percent of non-farm jobs, as our Data Wonk columnist has reported. Walker has also targeted mining for special attention, an industry that provides one-tenth of one percent of all non-farm jobs in the state.
Even as he has lavished our tax dollars on yesterday’s technology of manufacturing and mining, he has ignored the low-hanging fruit of alternative energy. Wisconsin has wind and solar companies that Walker has ignored, uttering not one word about their value and potential growth in this state. Wisconsin spends more than $12 billion annually to import coal and gas, importing pollution to this state and exporting potential jobs to coal and gas producers.
The jobs of today are coming from technology companies in cities like Madison. But Walker has ignored Madison’s growing economy. Thompson was a big supporter of UW-Madison, which is the economic generator driving the bio-tech industry in Dane County. Walker, a college dropout, has cut university funding and attempted to eliminate the Wisconsin Idea, which calls for the university to improve the quality of life in the state.
What Wisconsin needs are more workers, specifically college educated workers. As UW-Madison Chancellor Rebecca Blank recently noted, 22 percent of its non-resident students are still here a year after graduation, and their brains can help continue the economic transformation of Madison. Cities like Madison and Milwaukee are attractive to millennials, who like walkable cities, mass transit and bicycle-friendly policies, all things Walker has done nothing to promote. As a candidate he has denigrated both Milwaukee, running against it in the 2012 recall, and Madison, with his recent attacks making clear his view of the city.
And astoundingly, he has spent $1.3 billion less on state highways and expressways than Doyle, a governor who transferred money from the state transportation fund to increase school funding. Walker would rank even further behind Doyle if he hadn’t borrowed so much, driving the transportation budget to a historic high level — 25 percent of all funding — of debt.
Walker’s style of governing hasn’t made Wisconsin “open for business” but open for business giveaways — who in turn give him campaign donations. Nearly 60 percent of companies getting state subsidies in Walker’s first term donated to him. And Wisconsin Manufacturers & Commerce, which pushed for the manufacturing tax cut, has given huge donations to Walker and Republicans. And mining company Gogebic Taconite, which successfully pushed for a pro-mining law passed by Walker and Republicans, secretly donated $700,000 to support his reelection.
Walker has still not delivered the 250,000 new jobs he promised, nearly four year after this was supposed to have been achieved. It would be difficult to explain his approach to business based on any economic theory, but is easily explained through political science. Walker is a career politician who has been in office since age 25 and knows companies are more likely to donate to him if he gives them subsidies.
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