Business and politics

Good Corp, Bad Corp

Like many others in Trump’s America, big business seems to be confused on where it stands. One minute it is receiving its dream list of tax cuts and regulatory rollbacks, the next minute it is being attacked by the president for real or imaginary transgressions.

Trump’s corporate villain du jour is Amazon.com, which he has criticized for supposed offenses such as cheating the U.S. Postal Service. As with Trump’s other Twitter tirades, any grain of truth in his position is overwhelmed by a torrent of incoherent and misdirected accusations and insults.

Amazon certainly has a lot to answer for. The online behemoth has gone a long way in supplanting Walmart as the country’s most controversial retailer. The labor practices in its distribution centers are horrendous. It is decimating small business. Most recently, it is conducting a competition among 20 localities for a second headquarters campus that will supposedly create 50,000 jobs, signaling that it expects a giant subsidy package from the winner. Some places are ponying up offers in the billions, setting the stage for a future fiscal disaster.

Trump has focused on none of these issues in his tweetstorms against Amazon. He did mention the issue of sales tax collection, though his critique was out of date. After years of refusing to collect taxes in most parts of the country, Amazon has made agreements with state governments yet is still not collecting the local component in many places and is not requiring the third-party vendors that use its website to add taxes on their sales.

It is unclear whether Trump’s complaint about Amazon’s arrangement with the Postal Service has any validity, given that the terms are confidential. What seems to be inaccurate is the claim that the USPS is losing money on the packages its delivers for Amazon, which is enabling the post office to make use of excess capacity.

The problem is that Trump’s sloppy criticism is prompting many people to jump to the defense of Amazon, which doesn’t deserve all the support. The Washington Post, separately owned by Amazon CEO Jeff Bezos and probably the real target of Trump’s wrath, should be defended for its critical reporting on a corrupt administration. Yet even if Trump is incapable of making the distinction, others should not feel that rising to protect the free press requires one to also take the side of a corporate cousin involved in very different activities.

The Amazon situation is a symptom of a larger problem. Trump’s potshots against various companies amount to fake corporate campaigns that may be making it more difficult for real campaigners to get their message across — in the same way that Trump’s ham-fisted tariffs are complicating things for legitimate fair trade activists. To the extent that his fake criticisms engender pro-corporate responses, Trump could end up strengthening the position of big business.

If Trump were smarter, one might think that was his intention all along. More likely, it just another aspect of the chaos in which we must now live.

Trump Goes Easy on Major Corporate Offenders

It’s unclear to what extent the Obama Administration’s practice of extracting unprecedented monetary penalties on miscreant companies proved to be an effective deterrent, but at least the billion-dollar fines and settlements served to highlight the ongoing problem of corporate crime.

The Trump Administration seems to be a lot less interested in cracking down on the most egregious corporate offenders. Although the enforcement arms of agencies such as OSHA and EPA are still operating along normal lines, there has been a sharp decline in the number of mega-penalty cases announced by the Justice Department.

This conclusion emerges from an analysis of the data recently added to the Violation Tracker database covering cases through the end of the Trump Administration’s first year in office on January 19.

Since the largest penalties are normally imposed on the largest corporations, I did an analysis focusing on the Fortune 100 list of the very largest U.S. publicly traded companies. I found that overall federal penalties imposed on these firms during Trump’s first 12 months totaled $1.1 billion, compared to an annual average of more than $17 billion during the Obama years.

The Obama totals, of course, reflected extraordinary settlements with the largest banks to resolve allegations relating to their role in bringing about the financial meltdown of a decade ago. These included, for example, the $16 billion settlement with Bank of America in 2014 and the $13 billion settlement with JPMorgan Chase the year before.

Those financial services sector settlements peaked during the middle years of the Obama era. Yet Trump’s $1.1 billion first-year total is still far below the annual average of more than $9 billion for the Fortune 100 during Obama’s final two years in office. It also trails behind the $3 billion total during Obama’s first year.

Looking at all corporate offenders, there were 44 cases with penalties of $1 billion or more during the Obama era yet only two during Trump’s first year, and he doesn’t really deserve credit for those. One is the $5.5 billion settlement reached by the Federal Housing Finance Agency with the Royal Bank of Scotland relating to the sale of toxic securities to Fannie Mae and Freddie Mac. That case had been filed in 2008, and the settlement had been negotiated under Obama. The other is the a $1.4 billion penalty against Volkswagen for its emissions cheating that appears in EPA records with a date of May 17, 2017 but was actually part of a larger $4.3 billion settlement announced by the Justice Department during the last days of the Obama Administration.

There is also an interesting pattern among Trump Administration penalties in the next tier down—those of $100 million or more. The parent companies involved in about two-thirds of these cases are foreign, especially those with the largest penalty totals. They include the Chinese telecom company ZTE, which was penalized for export control violations, and the Swedish telecom Telia, which was punished under the Foreign Corrupt Practices Act.

It appears that the Trump Administration is more likely to get tough with a corporate violator if the company is not based in the United States, while domestic companies get treated more leniently. I guess the slogan is: Make Domestic Corporate Criminals Great Again.

Note: you can do analyses of your own on Violation Tracker using our new feature allowing search results to be filtered by presidential administration.

The Bonus Boondoggle

Home Depot is the latest company to join the bonus bandwagon, announcing that it will give hourly employees one-time payments of up to $1,000 as a “reward to our associates for continuing to deliver outstanding customer service.” CEO Craig Menear added: “This incremental investment in our associates was made possible by the new tax reform bill.”

No one should begrudge a few more bucks to underpaid retail workers, but the bonuses should be regarded with a skeptical eye. It’s clear, to begin with, that the companies making these announcements are doing so to curry favor with the Trump Administration and Congressional Republicans. And the amounts being offered to employees represent a small portion of the financial benefits the corporations will enjoy from the tax giveaway. At Bank of America that portion was reported to be about 5 percent.

There’s also a problem with the way the payments are being made. The fact that many of the workers are being given one-time bonuses rather than increases in their base pay means that the impact will be fleeting and do little to address the ongoing problem of wage stagnation.

But perhaps worst of all is that employers are taking these steps on their own rather than negotiating with their workers. That’s possible because they are in almost all cases non-union. Some such as Walmart have a notorious history of anti-union animus, while others like Starbucks have resisted organizing drives in more subtle ways.

There are a few exceptions. For example, AT&T, which is extensively unionized, discussed its bonuses with the Communications Workers of America before making the announcement. Nonetheless, the CWA, which had called on telecommunications companies to provide the $4,000 wage increase Republicans claimed would result from the tax bill, vowed to negotiate for more than the $1,000 payments AT&T said it would provide.

While AT&T maneuvered to downplay the role of the CWA, most of the bonus givers need not take such steps. They can present their payments purely as an act of corporate benevolence.

They are also an affirmation of the lop-sided balance of power in non-union companies. Management gets to decide whether and how to share the tax windfall in the same way it makes all other decisions that affect the lives of their workers. This is seen in the fact that companies such as Walmart and Comcast announced their bonuses around the same time they were carrying out substantial layoffs.

Large companies are adopting the Trumpian practice of pretending to act in the interest of workers without actually empowering them. If Corporate America really wanted to help their employees, they would drop their opposition to unions and let workers bargain for real gains rather than handouts.

The Corporate Trumps

After the 2016 election there was much trepidation in the corporate world about what the election of a self-proclaimed populist would mean for business. Trump’s intervention in the controversy over layoffs at a Carrier plant in Indiana was taken as a signal that he would be tough on the Fortune 500. “Corporate America unnerved by Trump” was the headline of a front-page story in the Washington Post on December 7, 2016.

At the one-year mark of the Trump Administration, those fears have been long forgotten. Although some corporate executives have spoken out against the president on certain social and civil rights issues, they have generally made peace with him on economic policy. They are delighted with his deregulatory moves and are thrilled at the windfall they are enjoying from the tax bill. Meanwhile, they grow wealthier by the day as a result of the stock market’s new bout of irrational exuberance.

Some companies are taking things a step further by also adopting Trump’s style of making exaggerated and self-serving claims while pretending to be acting in the national interest. The ranks of the these corporate Trumps seem to be proliferating.

Even before Trump took office, the Japanese company SoftBank proclaimed that it was inspired to invest $50 billion in the United States and create 50,000 jobs. The Taiwanese company Foxconn promised $7 billion in investment and also the nice round number of 50,000 jobs.

In February Intel, praising Trump’s policies, said it would invest $7 billion in a U.S. chip plant and create 3,000 jobs. In May the Indian business services outsourcer Infosys claimed it would hire up to 10,000 people in the United States.

During the summer, Foxconn upped its ante with an announcement that it would spend $10 billion to build a flat-screen plant in Wisconsin that would ultimately employ some 13,000 workers.

The latest company to Trumpify itself is Apple, which says it is so happy with the tax law changes that it will invest $30 billion in the U.S. over the next five years and create over 20,000 new jobs. Although it has not linked its move directly to Trump’s policies, Amazon’s announcement in September that it planned to create a second headquarters with 50,000 new jobs fits into the same trend.

What these announcements have in common is that they seem to be designed more as public relations stunts than as serious economic commitments. Many of the numbers are far beyond the norm and appear to be chosen to attract attention.

At a time when the typical plant workforce is shrinking, especially in high-tech, Foxconn’s claim that it will employ 13,000 people in that Wisconsin facility seems far-fetched. Equally implausible is Amazon’s stated intention to more than double its headquarters staff. The idea that Apple, which was built on cheap Chinese labor, will suddenly become a high-road domestic employer is preposterous.

It is unclear whether some of these initiatives will ever see the light of day at any employment level. Foxconn, in particular, has a track record of failing to follow through on announced projects.

Some of the companies are probably currying favor with the Trump Administration in order to achieve regulatory relief or other administrative benefit. Some, especially Foxconn and Amazon, have used their announcements to encourage state and local officials to offer bountiful financial incentive packages. Apple is trying to burnish its image long tarnished by foreign labor scandals and accusations of tax evasion on a monumental scale.

What all the companies are counting on is that eventually their lavish promises will have been forgotten when they deliver a lot less in the way of investment and jobs – and especially job quality. Taking their cue from Trump, they are focusing on the short-term benefits of making unsubstantiated statements and giving little heed to the longer-run consequences of their actions.

Wage Reparations

Donald Trump got a lot of mileage during his presidential campaign from criticizing the poor record of wage growth during the Obama era. Since taking office he has done nothing to directly address the issue. In fact, his administration’s attacks on labor rights have made it more difficult for workers to push for higher pay through unions.

Instead, Trump and his Republican allies in Congress came up with the cynical ploy of promoting their massive corporate tax giveaway as an indirect way of boosting paychecks. The right has always tried to lure labor with the promise of higher net pay that would come from reduced withholding schedules. Yet this time the claim was that companies would respond to reductions in their tax liabilities by boosting gross pay.

From the perspective of labor market dynamics, this made no sense whatsoever. There is no direct tie between corporate tax rates and wage levels. Most of the U.S. public seemed to understand this and expressed little enthusiasm for the tax bill.

Now, however, selected corporations are in effect colluding with Trump by announcing selective wage increases that they claim are inspired by the corporate tax reductions. Walmart is the latest and largest of the employers to play this game with plans to increase starting wages for its “associates” to the princely sum of $11 an hour. Some employees will be awarded one-time bonuses ranging from $200 (for those on the job for less than two years) to $1,000 for those hardy souls who have stuck it out for 20 years.

This plan, like the ones announced by the likes of AT&T and Wells Fargo, is far from a market response to lower taxes. These companies are no doubt using the increases to curry favor with the White House in the hope of better outcomes in their federal regulatory problems.

Then there’s the fact that these are increases that Walmart in particular had to make in response to previous wage hikes at its competitors. Even so, Walmart’s increases will leave many of its employees short of a living wage.

Another reason to doubt these moves are tax-inspired acts of generosity is that the companies involved each have a history not only of keeping wages down but of taking steps to deny workers the full pay to which they were entitled. In other words, all three have a history of wage theft.

Walmart, of course, was long the most notorious employer in this regard. It found myriad ways to get employees to work off the clock, thus violating the minimum wage and overtime provisions of the Fair Labor Standards Act. In the late 2000s Walmart was fined $33 million by the Department of Labor’s Wage and Hour Division and paid out hundreds of millions of dollars more to settle a slew of private collective-action lawsuits.

AT&T and its subsidiaries have paid out more than $80 million to settle about a dozen similar wage and hour and misclassification cases. Wells Fargo and its subsidiaries have paid more than $120 million in at least 17 cases.

These settlements provided some necessary relief, but the amounts probably don’t begin to approximate the full extent to which the companies shortchanged their workers.

Consequently, whatever voluntary pay increases the companies are offering now can be seen as additional reparations for their past sins of wage theft.

If the management of Walmart really wanted to solve its compensation shortcomings once and for all, it would at long last recognize the right of its workers to form a union and bargain collectively.

Note: the litigation figures cited here come from data being collected for a forthcoming expansion of Violation Tracker.

The Corporate Crook Conquest of the Executive Branch

It appears that the Trump Administration will not rest until every last federal regulatory agency is under the control of a corporate surrogate. The reverse revolving door is swinging wildly as business foxes swarm into the rulemaking henhouses.

Among the latest predators is Alex Azar II, who was just nominated by Trump to head the Department of Health and Human Services, a position Tom Price had to vacate amid the uproar over his excessive use of chartered jets for routine government travel. Until earlier this year Azar was the president of the U.S. division of pharmaceutical giant Eli Lilly.

Azar apparently shares Price’s abhorrence of the Affordable Care Act, but he also brings the perspective of a top executive for a drug company with a particularly sordid track record. For the past 40 years Lilly has been embroiled in a series of scandals involving unsafe products and the marketing of drugs for unapproved uses. Among the many cases were some that involved criminal charges.

In 1985 Lilly pleaded guilty to charges that it failed to notify federal regulators about deaths and illnesses linked to Oraflex. The company’s former chief medical officer entered a plea of no contest to similar individual charges. A Justice Department report put the number of deaths the company had covered up at 28.

In 2009 the U.S. Justice Department announced that Lilly had agreed to pay a $515 million criminal fine as part of the resolution of allegations relating to the illegal marketing of its schizophrenia drug Zyprexa.

The company has also faced bribery allegations. In December 2012 the U.S. Securities and Exchange Commission announced that Lilly would pay a total of $29.4 million to resolve charges that some of its subsidiaries violated the Foreign Corrupt Practices Act by making improper payments to win business in Russia, Brazil, China and Poland.

Violation Tracker’s tally on Eli Lilly amounts to $1.49 billion in penalties since 2000.

Meanwhile, the Senate has confirmed (along party lines) the Trump Administration’s nomination of coal mining executive David Zatezalo to head the Mine Safety and Health Administration. For seven years Zatezalo served as chairman of Rhino Resource Partners, where he clashed with MSHA over the company’s safety problems. The agency issued two rare “pattern of violation” warnings against the company. Violation Tracker contains 160 cases involving Rhino with total penalties of more than $2 million.

And given the headlong rush by Congressional Republicans to pass their tax legislation, it should be noticed that the Trump Administration’s interim head of the Internal Revenue Service (following the resignation of John Koskinen, who had been named by Obama) is David Kautter, who spent most of his career at the accounting firm Ernst & Young, which now prefers to be called EY.

Kautter was in charge of the tax compliance department at Ernst, which to a great extent meant helping clients dodge their fiscal obligations. In 2013 the firm had to pay $123 million to settle federal criminal charges of wrongful conduct in connection with illegitimate tax shelters (it was offered a non-prosecution agreement).

The phrase regulatory capture used to refer to tendency of agencies to gradually become more sympathetic to the needs of the industries they were supposed to oversee. Under Trump that process has been accelerated, with regulatory posts being given to individuals who are already corporate insiders or shills for the worst the business world has to offer. More than regulatory capture, it is the corporate crook conquest of the executive branch.

Bizarro-World Worker Populism at Trump’s OSHA

The bizarro-world worker populism of Donald Trump strikes again. The White House recently nominated Scott Mugno to be the Assistant Secretary of Labor in charge of the Occupational Safety and Health Administration. Mugno (photo at left) is not a worker safety advocate, occupational health scientist or a union official. Instead, he is a corporate safety executive at the shipping giant FedEx.

Data in Violation Tracker shows since 2000 FedEx has racked up $335,853 in OSHA penalties (counting only those fines of $5,000 or more designated as serious, willful or repeated). This total is the 208th largest among the 1,777 parent companies in Violation Tracker with OSHA fines.

While FedEx may not be at the very top of the OSHA penalty list, it does have some significant safety blemishes on its record. In 2014, for example, OSHA proposed a fine of $44,000 against the company for failing to properly guard a conveyor belt at its facility in Wilmington, Massachusetts. In its press release announcing the proposed penalty (which FedEx managed to get deleted), the agency noted that the company had previously been cited for the same issue at two other facilities.

Moreover, FedEx in general and Mugno in particular have tried to weaken OSHA oversight. In a 2006 presentation at a U.S. Chamber of Commerce event, Mugno argued that workers needed to take more responsibility for health and safety issues, conveniently ignoring the fact that they rarely have the autonomy to make meaningful changes in workplace conditions.

Another sign of Mugno’s orientation is the warm reception his nomination has received from business groups such as the Chamber and the American Trucking Association. At the same time, public interest groups have expressed concern. Public Citizen came out in opposition to the nomination, citing Mugno’s 2006 remarks and arguing that his “stance on laws and regulations do not mesh with leading an agency tasked with writing rules to ensure safe and healthy working conditions.” The Center for Progressive Reform posted a long list of questions that need to be put to Mugno.

The Center, by the way, has just introduced a Crimes Against Workers Database that compiles information on state-level criminal actions against companies and their executives implicated in serious workplace accidents. (I’m pleased to report that the database includes links to Violation Tracker data, and I plan to reciprocate.)

It was to be expected that Trump, who repeatedly bashed the EPA during the presidential campaign, would have named a climate change denier and regulation hater like Scott Pruitt to head that agency. Yet Trump did not carry on a similar tirade against OSHA, perhaps realizing that many of his blue-collar supporters were all too aware of workplace hazards that needed the agency’s oversight.

If Trump were any kind of real populist, he could have named a true worker safety advocate to OSHA without breaking any campaign promises. Instead, he brought in a business apologist who will pursue the Chamber agenda and raise the risk level for millions of American workers. The Trump corporate takeover marches on.

Corporate America Doesn’t Qualify for Moral Leadership Either

It may turn out that Donald Trump’s greatest contribution to American business is allowing the chief executives of tainted corporations to take a morally superior posture toward a presidency that seems to be completely devoid of principle. Their brands are boosted as his becomes increasingly toxic.

It is a good thing that big business is taking steps to separate itself from Trump. The collapse of the two advisory councils is not only a rebuke to Trump’s offensive comments on the events in Charlottesville but also an overdue retreat from entities that were set up mainly to foster the illusion that this administration is taking serious steps to reform the economy.

Yet it is dismaying that the moral vacuum created by Trump is being filled by the likes of Walmart chief executive Douglas McMillon, who got himself featured on the front page of the New York Times for a statement criticizing Trump.

For years the giant retailer was a national symbol of discriminatory practices. In 2009 it had to pay $17.5 million to settle a lawsuit alleging that it discriminated against African-Americans in the recruitment and hiring of truck drivers. The company was also widely accusing of gender discrimination. In 2010 the company was required to pay $11.7 million to settle a case brought by the U.S. Equal Employment Opportunity Commission, and it was facing potential damages in the billions from a class action suit brought on behalf of more than 1 million female employees until the Supreme Court came to its rescue and threw out the case for what amounted to technical reasons.

In addition to discrimination, Walmart has been at the center of countless controversies involved wage theft, union-busting, tax avoidance, bribery and much more.

After Merck CEO Kenneth Frazier led the way among business critics of Trump’s embrace of white nationalism, the president struck back with a tweet referring to “ripoff drug prices.” While Trump was just being vindictive, it’s true that Merck’s reputation is far from untarnished.

In 2011 the drugmaker agreed to pay a $321 million criminal fine and a $628 million civil settlement to resolve allegations that it illegally promoted and marketed the painkiller Vioxx. This came after Merck had to remove the drug from the market in the wake of reports that the company for years covered up evidence of serious safety issues surrounding its blockbuster product. This is just one of a long list of its cases involving illegal marketing, overbilling, false claims and anti-competitive practices.

Another of the CEOs who spoke out in response to Trump’s comments was JPMorgan Chase’s Jamie Dimon. Earlier this year, the bank had to pay $53 million to settle a case brought by the U.S. Attorney in Manhattan accusing it of engaging in discrimination on the basis of race and national origin in its mortgage business.

JPMorgan Chase was one of the parties that helped bring about the financial collapse of a decade ago, and in 2013 it agreed to a $13 billion settlement of federal and state allegations relating to the packaging and sale of toxic mortgage-backed securities.

In 2015 JPMorgan had to pay a $550 million criminal fine to resolve federal charges that it and other large banks conspired to manipulate foreign exchange markets. There are many more entries in the corporate rap sheet of this company, which since the beginning of 2010 has had to pay out more than $28 billion in fines and settlements.

It would be difficult to find any members of the disbanded advisory councils whose companies have not engaged in serious misconduct of one sort or another.

Such is the peril of looking for paradigms of virtue in the business world. Corporate executives should, along with many others, speak out against Trump’s reprehensible comments, but they cannot lay claim to moral leadership.

Foreign Investment and America First

Donald Trump has built an image as a champion of workers by fomenting fear of immigrants. Get rid of the foreign-born, he vows, and native workers will prosper.

What’s odd is that this misguided notion is coupled with an embrace of foreign corporations. The administration’s America First economic policy relies to a substantial degree on promoting investment from abroad.

Many of Trump’s supposed job creation achievements have involved Asian companies. Soon after the election Trump claimed that Japan’s SoftBank had promised to invest $50 billion in the United States and create 50,000 jobs. Soon thereafter, Trump and Chinese mogul Jack Ma vowed that the latter’s Alibaba e-commerce empire would create 1 million U.S. jobs. In June, Samsung said it would open an appliance plant in South Carolina.

More recently, Japanese automakers Toyota and Mazda said they would jointly build a $1.6 billion U.S. assembly plant with 4,000 jobs. With the blessing of the White House, Taiwan’s Foxconn announced plans for a $10 billion flat-screen plant in Wisconsin (probably in the Congressional district of Speaker Paul Ryan) that would purportedly employ up to 13,000 people. Foxconn is reported to be considering another plant in Michigan.

While these announcements are presented as a boon to American workers, there are reasons to be cautious. Companies such as Foxconn have made big promises in the U.S. before and failed to deliver. It and SoftBank and Alibaba may be simply currying favor with Trump and will be unable to make good on their extravagant job-creation projections. Their main aim may be to discourage some of Trump’s more aggressive protectionist tendencies.

And even if Foxconn’s projects do materialize this time, there are questions about the quality of the jobs it may create. Foxconn has a long reputation for abusive labor practices in China, where it has been a leading contractor for Apple.

Concerns about the U.S. labor practices of foreign companies are not just a matter of conjecture. In fact, while Foxconn’s plans have been all over the news, less coverage was given to what happened at the Nissan assembly plant in Canton, Mississippi: an organizing drive by the United Auto Workers was soundly defeated, with the union blaming the outcome on an aggressive management campaign of scare tactics, intimidation and misinformation.

What happened in Canton is nothing new. For the past three decades, Asian and European automakers have been opening U.S. assembly plants, focusing on states with low union density and a political climate hostile to labor organizing. Taking advantage of their non-union status, they have made excessive use of contingent labor and weakened the ability of workers to act collectively to improve their conditions.

Trump, of course, launched no tweet storms against Nissan and expressed no support for the workers in Canton. On the contrary, for a supposedly populist president, Trump has promoted a series of anti-worker policies. These include moves to shift the National Labor Relations Board in a pro-employer direction, reverse the overtime pay reforms adopted by the Obama Labor Department and weaken workplace safety and health rules.

In Trump’s worldview, workers are supposed to express solidarity not with each other but rather with their employers and their President. That’s a strange sort of populism.

Is Foxconn a Con?

It’s common for governors to stage publicity events to announce major job-creating investments in their state. This allows them to take implicit credit for a project that was probably helped along with tax breaks and other financial giveaways.

When it came to the Taiwanese company Foxconn’s plan to build a $10 billion flat-screen plant in Wisconsin, the hype was taken to a new level. Gov. Scott Walker and Foxconn’s Chairman Terry Gou made the announcement not at the state capitol but at the White House, where they were joined by President Trump, Vice President Pence, Speaker Paul Ryan and a host of other high-level officials of the federal government.

As you might expect, the event quickly turned into a celebration of the Trump Administration. Walker, Pence and Ryan, in whose Congressional district the massive plant is to be sited, gushed about Trump’s economic leadership, with Pence declaring: “Under President Donald Trump, America is back.”

That apparently was not enough for Trump, who found it necessary to celebrate himself even more. Referring to Gou, the President declared: “If I didn’t get elected, he definitely would not be spending $10 billion” in the United States.

The creation of numerous new manufacturing jobs is something that will be welcomed by the working people of Wisconsin, but there are reasons, beyond Trump’s political exploitation of the deal, to remain suspicious.

The first matter of concern is the company itself. Foxconn has a long history of abusive labor practices in its overseas plants, including those used to supply Apple. Conditions in the company’s Chinese plants were so bad that in 2010 there was a rash of suicides among overworked employees. The company installed nets on its plants to discourage workers from jumping to their deaths. Foxconn later claimed to improve its labor conditions but the company is far from a high-road employer.

Then there are the claims about the terms of the Wisconsin deal. Gov. Walker claimed that the plant would directly create 13,000 jobs. That was good for generating excitement, but it is a dubious figure. Manufacturing establishments no longer employ anything close to that number of workers.

Out of curiosity, I checked with the Bureau of Labor Statistics to see how many plants currently exist with 10,000 or more workers. It turns out the BLS does not have that information because, as an analyst told me, there are so few facilities of that size. The trend, of course, is toward higher levels of automation and much smaller workforces.

Then there’s the issue of who is paying for the plant. While Trump and the others praised the deal as an example of private sector vitality, Foxconn’s plant will be underwritten in large part by the taxpayers of Wisconsin. Walker said that the state would “invest” $3 billion in the project. That would be the fourth largest economic development subsidy package ever offered by a state.

Despite the promises of public officials, extravagant subsidies rarely provide economic benefits equal to the loss of tax revenue. Wisconsin has a particularly bad record in this regard. The Walker Administration and its privatized economic development agency have been at the center of a long string of controversies about cronyism and poor job-creation outcomes.

The Foxconn deal will provide political benefits for Walker, Ryan and Trump, but it is unclear how much good it will actually do for the people of Wisconsin.