Bruce Murphy
Murphy’s Law

The Governor of Giveaways

Instead of building a real economy, Walker is trying to buy one.

By - Feb 20th, 2018 12:27 pm
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Gov. Walker at Pratt Industries for the ribbon cutting of their new manufacturing facility. In may 2015, the Wisconsin Economic Development Corporation approved a $1.75 million loan and $2.4 million in job tax credits for the project.

Gov. Walker at Pratt Industries for the ribbon cutting of their new manufacturing facility. In may 2015, the Wisconsin Economic Development Corporation approved a $1.75 million loan and $2.4 million in job tax credits for the project.

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.

And the amount of subsidy keeps growing. Walker, is spending eight times more tax dollars per job created for Foxconn than he was previously spending, as the Journal Sentinel found. But the actual total of $315,000 per job spent on Foxconn’s promised 13,000 jobs is 12 times higher than Doyle spent per job (about $25,000) for Mercury Marine and 217 times higher than Republican Gov. Tommy Thompson spent ($8.25 million for 5,700 jobs) to subsidize General Motors In Janesville in 1988.

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.

Walker has no coherent theory of economic development, other than lower taxes, which is not a major factor in new business investment and has been a failure in states that emphasize this approach.

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.

But even when it comes to old-line companies like manufacturing, probably the most important thing a government can do is improve transportation. And what has Walker done? He refused federal funding for high-speed rail, which would have connected the growing economies of metropolitan Chicago, Milwaukee and Madison.

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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Categories: Murphy's Law, Politics

20 thoughts on “Murphy’s Law: The Governor of Giveaways”

  1. Terry says:

    Exactly! Excellent reporting Mr. Murphy!

    Career Politician Scott Walker is a charlatan and a con man! He has handed away BILLIONS of our money already and he just keeps spending! He can’t build a real economy so he sold the state out! What a nightmare Career Politician Walker and Republicans have created. Vote these crooks and bumbling idiots out of office!

    Dump Walker 2018!!

  2. Terry says:

    It’s weird, one guy in this picture looks like The Joker. The other one looks like a guy with crazy orange hair.

    Dump Walker 2018

  3. ERIC J. says:

    -What did we expect from a guy that dropped out from Marquette U near graduation.
    -Isn’t even Trump now talking ” trains ” & other mass transit ?? ( Funded by the states now no less )

  4. ERIC J. says:

    -Sorry about the repeated comments

  5. Bill Kurtz says:

    You’ll notice his payoffs are going to businesses in areas that voted for him and Trump- Racine County and now the Fox Valley. But the Foxconn deal is very unpopular, and becomes more so the farther you go from Racine County.

  6. Troll says:

    Bruce your right. The UW schools have been a bargain under Scott Walker. Lets stop the Walker giveaways and put the whole UW System and MATC at rates similar to the private sector. It doesn’t makes any sense to bank roll higher education. Considering Wisconsin is a brain drain state. It makes no sense to cut these back room late deals to make higher education so ridiculously cheap. End the subsidies.

  7. John Casper says:

    @ Troll @#6

    On the thread in the link below, you said, “I think I have daddy issue.”

    Do you think that explains why you missed what Bruce wrote?

  8. Aggie says:

    So if I start a company and employ myself, how do I sign up for the $315,000 handout? Or does this only work if I am from another country?

  9. Terry says:

    Career Politician Scott Walker FoxCONNED Wisconsin and now everybody is lining up for some of that sweet Corporate Welfare. Pay up Walker! Pay up Taxpayers!

    Dump Walker 2018

  10. You get Walker right, Bruce. But your “high tech-build the Madison economy” solution forgets the depression-like conditions in Milwaukee’s black community. Neither Walker nor Barrett have made inroads in ameliorating concentrated poverty in the nation’s 4th poorest city. Our Chicago-level rates of homicide are signs of desperation and high tech solutions seem to me to amount to not much more than trickle down economics. That won’t cut it in Milwaukee’s central city.

  11. jeff brown deer says:

    Didn’t Walker promise during one of his election/reelection campaigns to spend $$$ on a 27th Street Corridor improvement plan? What ever happened with that promise?

  12. Timothy J Haering says:

    A BIg GOvt Republican. Used to work for one. Anomaly lacks anomalousness. Everyone involved in govt is BIG GOVT now. WHo is the Denver Bronco fa in the photo? Seems related to PeeWee Herman, sartorially speaking. Walker and Trump. Let me know when I can open my eyes.

  13. Troll says:

    Apparently, only the left can decide the greater good of the state. We can only subsidize grocery store, hospitals, farmers, and teachers. Subsidizing high tech jobs is apparently a bridge to far. Tom Barrett can have the city subsidize a trolley and that is okay.

  14. Aggie says:

    I would much rather have my taxes fund an opportunity equalizing, public transportation system and improvements to our local schools rather than making a Taiwanese billionaire even richer while sucking the talent from other WI businesses that have committed to the state without these handouts.

  15. Troll says:

    Everyday the richest man in the world delivers package with a smile on its side. End his subsidies and the post office dies. Do you hate mail men?

  16. James says:

    #11 jeff

    Just before the 2012 election, Walker announced that $100 million would be spent over the next two years to transform Milwaukee’s 30th Street Industrial Corridor.

    As to the money, $42 million went to the downtown Marriott, and $20 million went to the Water Center.

  17. Aggie says:

    Regarding Bezos, if we ended his subsidies, perhaps all of the small businesses that actually create communities wouldn’t dry up and fade away and people could work in their own neighborhood. More local businesses and people on the street would also counter the recent trend of porch pirates stealing all of those smiley faced boxes from people homes while they are working ; )

  18. Terry says:

    4.5 BILLION of Wisconsinite’s tax dollars are going straight to a Taiwainese, ahem CHINESE company in Corporate Welfare for a few low wage tv screen maker jobs. It’s almost like Wisconsin is a third world country.
    Welcome to Walker’s Wississippi!
    Enjoy your taxes going through the roof Republicans so you can subsidize crappy jobs for people from Illinois as well as a foreign company.
    Newsflash, real leaders help create a real economy not try (and fail) to buy one. Furthermore in the words of Mr. Chappelle, “I want to wear Nikes, I don’t want to make them!” Welcome to the third world Wisconsin. Thank Walker. Thank a republican! And then…vote these inept, scheming, duplicitous charlatans out of office!

    Dump Walker 2018

  19. Bill says:

    This article pretty much sums it up. Wisconsin is losing big time under Walker. Just more corruption and massive handouts are until this guy is gone. And one more time, Foxconn is not a high tech company in the sense that Google, Apple and Microsoft are. They’re a contract manufacturer of tech products that will churn through employees because their wages will be far less than touted and working conditions, such as mandatory overtime, not desirable to an educated workforce. That’s my prediction anyway. It’s Walker’s 1950s dream economy.

  20. Terry says:

    @Bill, well said! Being from uber-liberal and ultra-thriving Seattle I can attest to your statements. FoxCON is no Microsoft, Amazon, Apple or Google. They are as you said, a contract manufacturer of tech products. Welcome to the Third World Wisconsin. Hope yiu enjoy paying 4.5 BILLION to a foreign company for crappy slave wage jobs. Thank career politician Scott Walker! Thank a republican! Walker FOXCONNED Wisconsin and now the once proud state of Wisconsin has become Walker’s Wississippi!

    Dump Walker 2018

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