“I’ll gladly pay you Tuesday for a hamburger today,” was a catchphrase made famous by J. Wellington Wimpy, a character in the comic strip Popeye. But it also describes, with slight modification, the attitude of crony capitalist companies to American taxpayers: “I’ll begrudgingly pay you in the future for services provided today.”
A couple of week’s ago I wrote about the greatest crony capitalist deal in Wisconsin history. The state offered to Foxconn various government-granted privileges, a mix of different types reportedly worth $3 billion. The company agrees to create 1,000 jobs in the second half of 2017 and employment will grow to 13,000 by 2021. All this at an average of $53,900 a year per employee and in return the taxpayers of Wisconsin subsidize the workers at a cost of $231,000 per job.
And then Foxconn pulled a Wimpy on Wisconsin by saying, “I’ll gladly pay you in 25 years for the $3 billion today.”
Based on estimates from the non-partisan Legislative Fiscal Bureau—which provides fiscal analysis for the state legislature—Wisconsin will not receive a return on its investment in the project until about 2042.
“Any cash-flow analysis that covers a period of nearly 30 years must be considered highly speculative,” said the report.
According to Rob Reinhardt, a bureau program supervisor, the bureau based its analysis on Foxconn reaching its threshold of 13,000 employees. If the actual employment number was 3,000, the break-even point would be so far in the future that it is “silly to talk about,” said Reinhardt.
Reuters reports that based on the report, “if 10 percent of projected new jobs from the project were filled by Illinois residents, a concern of several lawmakers, the state would not break even until about 2044.” I’m sure Wisconsin residents will be thrilled to hear that their state tax dollars are going to pay $231,000 per job for Illinois residents.
In Robert Altman’s 1980 live-action musical film Popeye, a sign in a restaurant reads “Positively NO CREDIT. This means YOU, Wimpy.” Maybe someday taxpayers will take the same initiative and put a message on their state signs that say, “Positively NO GOVERNMENT-GRANTED PRIVILEGES. This means YOU, Cronies.”