Tag: Subsidies

Cuck Fomcast

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After billions in public subsidies, Comcast has instituted data caps throughout its network.

The lesson here is that if you want to expend tax dollars for broader internet access, it is best that the networks receiving those subsidies should be owned by the taxpayer:

With millions of Americans trapped at home to protect themselves from a deadly pandemic during the holiday season, the Internet is one of the only conduits connecting them to friends, family and the outside world. Now, Comcast, one of the monopoly corporations that controls the conduit, is extending its fees on bandwidth usage to all 39 states where it operates — even as the company has received hundreds of millions of dollars of public subsidies and new tax breaks.

Whether or not those data caps remain permanent could hinge on whether president-elect Joe Biden and Democrats are willing to take action against a corporation that has been one of their major campaign donors.

At issue is Comcast’s move on Monday that caps home internet usage at 1.2TB of data per month for its customers in 12 additional states, and charging customers up to $100 per month if they exceed the cap. Comcast’s move was flagged by Stop The Cap, which discovered that the company had quietly updated language on its website.

The new limits, which will take effect in March, are being imposed in states that have given Comcast and its subsidiaries more than $738 million in tax subsidies in the last few decades. Those states include New York, Connecticut, and Pennsylvania, where state and local governments have given Comcast and its subsidiaries $484 million, $132 million, and $79 million in tax subsidies, respectively, according to data from Good Jobs First.

In all, Comcast and its subsidiaries — which include NBC and MSNBC — have received nearly $1 billion in state and local subsidies. Additionally, Comcast received $861 million in federal tax subsidies during the first year of the Trump tax cuts, according to the Institute for Taxation and Economic Policy.

“This is why monopolies are bad,” tweeted Public Citizen, a consumer advocacy organization. “Comcast can arbitrarily exploit us for profit during a pandemic just because it feels like it. Meanwhile, Comcast collects tons of tax breaks and government subsidies. Comcast should be broken up.”

No, Comcast should be expropriated and become a public agency operated for a public benefit. 

Creating 50 Comcasts where there was only 1 is not a fix.

Neither will happen though, they gave big bucks to the Biden campaign.

It Looks Like Jeff Bezos Did Something Good (By Accident)

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It appears that the debacle that was Amazon’s HQ2 competition, where we were subjected to the disgusting beauty pageant of cities abasing themselves competing for a second headquarters that eventually went to where Bezos owned mansions, is finally bearing fruit.

The horror at the that spectacle, was one of the reasons that Scott Walker’s Foxconn deal became so toxic in Wisconsin, which led in large part to his reelection loss in 2018.

Another result is that we are seeing efforts to claw back subsidies from companies that have not fulfilled their requirements, first in Ohio’s claw-back demands to GM, and now Wisconsin is threatening to cancel its disasterous deal with Foxconn. 

Much as I said with Ohio’s decision, about f%$#ing time:

Wisconsin is denying Foxconn Technology Group billions of dollars in state tax credits until officials with the company come to the table to draw up a new contract for the Racine County project — once touted as the “eighth wonder of the world” by President Donald Trump.

The company might also face financial penalties through claw-back provisions included in the existing contract if a new agreement isn’t reached.

In a letter sent Monday to the Taiwan-based company’s Vice Chairman Jay Lee, Wisconsin Economic Development Corp. Secretary Melissa Hughes said “Foxconn’s activities and investments in Wisconsin to date are not eligible for credit” under the more than $3 billion contract first signed back in 2017. The letter also underscores that negotiation attempts between the state and company this summer failed to result in a new contract.

………

The company reported in the summer it had created enough jobs in southeastern Wisconsin last year to receive state funds — despite being told almost a year ago that the $3 billion in tax subsidies would not be doled out until a new contract was drafted to match the project. State officials say tax subsidies agreed to in the contract are tied to jobs and capital investment for specific projects, which Foxconn is failing to deliver.

………
Regardless of how many jobs were added, WEDC said in the letter, the state is unable to calculate job creation or capital investment tax credits because Foxconn has failed to carry out the project as promised.

………

Claw-back provisions in Foxconn’s original contract show that, if the agreement is not amended by the end of 2023, the company could face up to $500 million in recovery payments.

Walker’s contract with Foxconn would provide incentives totaling as much as $3 billion over 15 years if the company reached the 13,000-employee benchmark and made a $10 billion capital investment in the state.

………

While originally promised as a Generation 10.5 facility that would build larger panels for TV screens, the project has downsized to Generation 6, which would manufacture small screens for mobile phones, tablets, notebooks and wearable devices.

“Today’s announcement cements Foxconn’s legacy in Wisconsin as one of broken promises, a lack of transparency, and a complete failure to create the jobs and infrastructure the company touted in 2017,” Assembly Minority Leader Gordon Hintz, D-Oshkosh, and longtime Foxconn critic, said in a statement. “Looking to the future, I hope lawmakers will assess projects based on what is best for Wisconsin, and utilize rigorous, independent economic analysis based in reality, rather than chasing pie-in-the-sky projects reeking of short-term political motives.”

Foxconn officials first came to the state in March 2019 to discuss amendments to the contract. Late last year, Evers’ administration told the company it no longer was eligible for tax subsidies under the existing contract, and a new document would need to be drafted. While amending a contract is a common practice, officials have said the state cannot unilaterally change the agreement without Foxconn’s participation.

I so hope that Foxconn gets gigged like a flounder.

This deal was a disaster, and thoroughly corrupt, and it needs to be ended.

The Rugged Individualist

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I am referring, of course, to Elon Musk, whose empire has been subsidized to the tune of almost $5 billion.

The actual number is likely far higher, given the indirect subsidies received, such as allowing PayPal, where he made original fortune, function like a bank without having to follow banking regulations, “Because ……… Internet.”

All of these fortunes have resulted from government subsidies, whether it’s Amazon’s early ability to evade sales taxes, Google’s military funding, etc.

The reporters at the LA Times have almost certainly missed some of the subsidies, because many, if not most, of them are indirect:

Los Angeles entrepreneur Elon Musk has built a multibillion-dollar fortune running companies that make electric cars, sell solar panels and launch rockets into space.

And he’s built those companies with the help of billions in government subsidies.

Tesla Motors Inc., SolarCity Corp. and Space Exploration Technologies Corp., known as SpaceX, together have benefited from an estimated $4.9 billion in government support, according to data compiled by The Times. The figure underscores a common theme running through his emerging empire: a public-private financing model underpinning long-shot start-ups.

………

Los Angeles entrepreneur Elon Musk has built a multibillion-dollar fortune running companies that make electric cars, sell solar panels and launch rockets into space.

And he’s built those companies with the help of billions in government subsidies.

Tesla Motors Inc., SolarCity Corp. and Space Exploration Technologies Corp., known as SpaceX, together have benefited from an estimated $4.9 billion in government support, according to data compiled by The Times. The figure underscores a common theme running through his emerging empire: a public-private financing model underpinning long-shot start-ups.

These are not long-shot startups.  These are meticulously constructed to extract maximum subsidies.

Also, SolarCity was not a long-shot, it was a corrupt bailout of his cousins who had run the company into the ground.

But public subsidies for Musk’s companies stand out both for the amount, relative to the size of the companies, and for their dependence on them.

“Government support is a theme of all three of these companies, and without it none of them would be around,” said Mark Spiegel, a hedge fund manager for Stanphyl Capital Partners who is shorting Tesla’s stock, a bet that pays off if Tesla shares fall.

Yes, they are short sellers, but that should not mask Musk’s hypocrisy in preaching rugged individualism while meticulously constructing his companies to maximize taxpayer subsidies.

Today in Wicked Bad Ideas

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Congress is looking to staple the National Science Foundation (NSF) to commercial interests, because it is so blazingly obvious that the problem with science in the United States is clearly that there are not profit incentives, said no one ever:

A bipartisan group of US senators and representatives has introduced legislation in Congress that would significantly change the operation of the National Science Foundation (NSF). Proponents of the bill say that the proposal aims “to solidify the United States’ leadership in scientific and technological innovation through increased investments in the discovery, creation, and commercialization of technology fields of the future”. To do so, the so-called Endless Frontier Act would expand the NSF’s remit, rename the organization and provide more than $100bn in support. The proposal has gained approval from many, but some have objected that it may undercut the NSF’s main objective, which is to fund basic scientific research.

Those behind the bill – four prominent US congresspeople – say that its introduction stems from the perception that international competitors, and particularly China, threaten to overtake the US technologically. “To win the 21st century, we need to invest in technologies of the future,” says Ro Kahana, a Democratic congressperson from California. “That means increasing public funding into those sectors of our economy that will drive innovation and create new jobs.”

Chuck Schumer, a New Yorker who leads the Democratic minority in the Senate, says that the US “cannot afford” to continue to underinvest in science while still “lead[ing] the world” in advanced research. That view is backed by Republican senator Todd Young of Indiana. “By virtue of being the first to emerge on the other side of this pandemic, the Chinese Communist Party is working hard to use the crisis to its advantage by extending influence over the global economy,” he claims. The new act, adds Republican representative Mike Gallagher of Wisconsin, who is the fourth member of the group introducing the legislation, “is a down payment for future generations of American technological leadership”.

………

Yet the proposal has drawn some criticism. Former NSF director Arden Bement told Science of his concern that the bill could indicate to Congress – which appropriates agencies’ funds – that investments in the bill’s innovative technologies override the importance of the NSF’s core mission of funding fundamental, curiosity-driven research. But Bement’s successor France Córdova, who completed her six-year term as NSF director in March, argues that current-day science involves more seamless integration between fundamental and applied research.

Gee, ya think?

One of the causes of inequality in our society are the extensive and intrusive subsidies provided by the government to private industry,  things like this initiative, and the expansion of IP provisions.

This is bad for science and bad for the economy.

Nature Cannot Be Fooled

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The good little Neoliberals in Chile decided to increase forestation and offset carbon emissions by paying loggers to plant forests.

This program achieved none of its goals:

A multi-decade state program to subsidize tree planting in one of South America’s wealthiest nations led to a loss of biodiversity and did little to increase the forests’ capacity to capture greenhouse gases.

Chile’s plantation forests more than doubled between 1986 and 2011, while native forests shrunk by 13%, according to a new report by U.S. and Chilean academics. The country subsidized tree planting while its forestry sector boomed over that period.

Yet the environmental benefits are not as clear. Subsidies accelerated biodiversity losses in Chile as plantations often focus on one or two profitable tree species, the report said. While forest area expanded by more than 100% between 1986 and 2011, the carbon stored in vegetation increased by just 1.98% during that period.

“Our simulations indicate that plantation subsidies accelerated biodiversity losses in Chile by encouraging the expansion of plantations into more biodiverse forests,” researchers said in the paper published inNature Susainability on Monday. Chile’s case “provides several cautionary lessons,” according to Robert Heilmayr at the University of California Santa Barbara, Cristian Echeverria at Universidad de Concepcion in Chile and Eric F. Lambin at Stanford University.

This has happened time and time again:  Attempts to enlist the profit motives to achieve a public good generate profits, but little in the way of public good.

The title is taken from Nobel Prize winning physicist Richard Feynman’s comment in the appendix that he authored for the report on the space shuttle Challenger destruction:

For a successful technology, reality must take precedence over public relations, for Nature cannot be fooled.

Nah Gah Nah Happen

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When GM closed down its Lordstown, Ohio plant, it violated the incentive deal that it cut with the state, and so may have to repay $60,000,000.00 to state and local governments.

This won’t happen of course, because holding corporations to the terms of their contracts isn’t “Business Friendly,” so they will let General Motors skate:

The state of Ohio has put General Motors on notice that it may be forced to repay more than $60 million in public subsidies as a result of the automaker closing its massive assembly plant last year in Lordstown.

The state’s collection effort, initially outlined in a letter to GM in March, has not been previously reported, and the automaker itself has not disclosed the potential liability to shareholders in its corporate filings.

State officials say the Lordstown shuttering, which made national headlines and drew the ire of President Donald Trump, violated the terms of two state economic development agreements that GM signed more than a decade ago, according to documents obtained by The Business Journal and ProPublica through public records requests. In return for tens of millions of dollars in tax breaks, the company had pledged to maintain operations at the Lordstown site until at least 2027.

“If the state were to claw back $60 million, that would be one of the biggest clawback events in U.S. history,” said Greg LeRoy, executive director of Good Jobs First, a national nonprofit that advocates for accountability in economic development. “This is very significant, very interesting that it would come from a Rust Belt state from a very pro-business administration.”

Ohio is not going to claw back even a fraction of the money, because they want to maintain their reputation as a, “Very pro-business administration,” and in our race to the bottom political system, this will trump every other consideration.

I expect, at most, a couple of job developments centers, and perhaps the donation of some land for a city park.

GM will never be made to pay their debts.

What a Surprise

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Won’t you look at that: Amazon is coming to NYC anyway – *without* requiring the public to finance shady deals, helipad handouts for Jeff Bezos, & corporate giveaways.

Maybe the Trump admin should focus more on cutting public assistance to billionaires instead of poor families. https://t.co/BbqhXbB9MM

— Alexandria Ocasio-Cortez (@AOC) December 6, 2019

Well, what do you know, after Amazon’s subsidies were threatened, and the company took its marbles and went home, Amazon just brought its marbles back:

Rep. Alexandria Ocasio-Cortez suggested the Trump administration “focus more on cutting public assistance to billionaires instead of poor families” after news broke Friday that Amazon was expanding its presence in New York City without the state giving the company billions in tax incentives.

The decision by the online giant to lease 335,000 square feet of office space in Manhattan and employee 1,500 employees in the consumer and advertising departments was first reported by the Wall Street Journal.

The announcement came roughly 10 months after Amazon announced it was ditching its widely condemned plan to locate a second headquarters site in Long Island City, Queens—a plan for which New York state would have given the online giant nearly $3 billion in tax incentives.

Ocasio-Cortez was among that plan’s most vocal critics, asking at the time, “Why should corporations that contribute nothing to the pot be in a position to take billions from the public?”

In a Twitter thread Saturday morning, the New York Democrat said that Amazon would now be “bringing work without the welfare.” Ocasio-Cortez also countered the Republican talking point that the city was losing out on thousands of jobs.

What a surprise.  Subsidies don’t make a difference.

And Amazon dot com is the biggest welfare cheat in the nation

Worst Incentive Deal Ever

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I am referring, of course, to former Wisconsin Governor Scott Walker’s deal with Foxconn, which an independent report has declared beyond redemption.

I don’t know why the state needed to commission a study to come to this conclusion, it was patently obvious to every voter in the Badger State:

In 2017, Wisconsin offered Foxconn a record-breaking subsidy to build an LCD factory in the state, only to see the promised factory fall behind schedule and grow progressively smaller. Now, the Wisconsin Department of Administration has requested a reassessment of the costs and benefits to the state regarding the far-tinier facility.

The report, which was conducted by Tim Bartik of the Upjohn Institute for Employment Research, finds that the smaller facility raises the already unusually high cost per job even further. If the subsidy levels in the current contract are kept, each Foxconn job would cost taxpayers about $290,000, Bartik found, compared to $172,000 if Foxconn built the original $10 billion, 13,000-job facility. For comparison, Bartik estimated the subsidies Virginia offered Amazon for its second headquarters amounted to between $10,000 and $13,000 per job.

“The most important conclusion of this analysis is that it is difficult to come up with plausible assumptions under which a revised Foxconn incentive contract, which offers similar credit rates to the original contract, has benefits exceeding costs,” Bartik wrote. “The incentives are so costly per job that it is hard to see how likely benefits will offset these costs.”

………

The analysis comes five months after a Foxconn executive met with Evers and expressed interest in revising the company’s contract with the state. Foxconn hasn’t said what it would push for, but Evers administration documents obtained by The Verge summarize the meeting and the company’s broad requests: updating the contract to reflect the smaller factory, including additional Foxconn subsidiaries, and extending the period Foxconn can qualify for capital investment tax credits.

Such changes make sense for Foxconn. The company has radically scaled back its plans and likely wants assurances that it won’t be found in breach of contract. But Evers was critical of the deal during his campaign and would likely be reluctant to agree to these changes without getting concessions of his own. In this context, the new economic impact assessment can be seen as setting a new baseline for further negotiations.

………

The Fiscal Bureau analysis was based on a best-case scenario. It relied on economic impact estimates supplied by the consulting firm EY (formerly Ernst & Young), which Foxconn had hired to pitch its project. It also assumed Foxconn would actually build what it promised and hire at an extremely fast rate. Instead, the company has repeatedly scaled back its plans and fallen far behind on hiring. Rather than a 20 million-square-foot factory manufacturing large LCD screens, Foxconn says the factory it’s now building will be less than 1 million square feet and make smaller screens. While the company had initially planned to employ 5,200 people by next year, it now says the new factory will employ only 1,500 people. Even that seems like a stretch goal: at the end of 2018, Foxconn employed only 156 people in the state.

………

Of course, there’s no guarantee that Foxconn will build what it is now saying it will, either. When The Verge spoke with O’Brien in June, his observations of LCD manufacturing machinery supply chains indicated that Foxconn was unlikely to meet the 2020 deadline it set for itself. If the last two years are any guide, any given Foxconn plan is only good until the next one.

One hopes that the implosion of this deal will take the bloom off of the rose for similar deals.

It’s happened with the Olympics, where taxpayers have increasingly revolted against the excesses of hosting the games.

Oh, You Delicate Snowflakes

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It looks like Amazon little fee-fees are getting hurt by criticism from some New York politicians, and it is threatening to take its balls* and go home.

The undeservedly wealthy and powerful are just SO sensitive:

Amazon.com is reconsidering its plan to bring 25,000 jobs to a new campus in New York City following a wave of opposition from local politicians, according to two people familiar with the company’s thinking.

The company has not leased or purchased office space for the project, making it easy to withdraw its commitment. Unlike in Virginia — where elected leaders quickly passed an incentive package for a separate headquarters facility — final approval from New York state is not expected until 2020.

Tennessee officials have also embraced Amazon’s plans to bring 5,000 jobs to Nashville, which this week approved $15.2 million in road, sewer and other improvements related to that project.

Amazon executives have had internal discussions recently to reassess the situation in New York and explore alternatives, said the two people, who spoke on the condition of anonymity to speak candidly about the company’s perspective.

“The question is whether it’s worth it if the politicians in New York don’t want the project, especially with how people in Virginia and Nashville have been so welcoming,” said one person familiar with the company’s plans.

Let me guess, this, “Person familiar with the company’s plans,” has a name that sounds a lot like, “Splif Cheetos.”

Amazon supporters are aghast that local New York politicians — including Gianaris and Van Bramer — have turned against the company.

They are aghast I tell you, aghast, that they are not being properly worshiped.

Who the f%$# do they think they are?  My cats?

*As an aside, you can see Amazon’s balls in their full glory on the website of the National Enquirer.

I Hope That This Means Something

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The New York State Senate has appointed a vociferous critic of Amazon “HQ2” deal to the Public Authorities Control Board, which has the power to stop the deal.

I think that there are a couple of things going on here, first the Senate is feeling its oats in challenging a governor of their own party who attempted to keep the body in Republican hands, and second, after the Foxconn debacle in Wisconsin, this deal has become much less popular with the general public.

In either case, :

Gov. Andrew M. Cuomo and newly emboldened Democrats in the State Senate appeared headed for open warfare on Monday over a plan to bring Amazon to New York City after the Senate leader named a critic of the $3 billion deal to a state board that could scuttle it.

 The decision to choose the critic, Senator Michael Gianaris, for the board immediately presented a direct political challenge for Mr. Cuomo — who must decide whether to refuse the Senate’s selection. And it demonstrated the ability of the Democrat-led State Legislature to call into question the governor’s control over the kinds of state boards that, in recent years, he had been mostly able to bend to his will.

 ………

 Mr. Cuomo could reject the pick, though doing so could create a protracted standoff with the Senate leader, Andrea Stewart-Cousins, and her fellow Democrats. Already, the battle lines were hardening on Monday as Mr. Cuomo’s office reacted angrily to Mr. Gianaris’s appointment.

 ………

 It was yet another sour note in the Amazon deal. Company executives have bristled at the intense criticism and, last week at a City Council hearing, seemed to float the notion that Amazon could reconsider its commitment to New York.

 The ability of a local legislator to block the deal to bring a major new Amazon campus to Long Island City was exactly what Mr. Cuomo and Mayor Bill de Blasio had tried to avoid when they decided to use a state development process and to bypass more onerous city rules. Opposition, while vocal, seemed futile.

 But now, with the insistence of Senate Democrats on appointing Mr. Gianaris to the little-known Public Authorities Control Board, those who want to stop Amazon from coming to Queens have gotten their most tangible boost yet. The board will have to decide on the development plan for Amazon, Mr. Cuomo has said, and could veto it.

 ………

 The obscure state board does have a history of blocking major deals: 14 years ago, it helped derail former Mayor Michael R. Bloomberg’s plans for a new stadium in Manhattan.

 ………

 He would be one of three voting members of the board; any voting member of the board has the power to stop projects that come before it.

………

Lawmakers have used the Public Authorities Control Board — whose voting members are appointed by the Senate, the Assembly and the governor — as a roadblock to big projects before. In 2005, Mr. Bloomberg saw his plan for a stadium on the West Side of Manhattan, part of the city’s bid to host the 2012 Olympics, shot down in front of the board by the vote of one state lawmaker, Sheldon Silver, who was then the Assembly speaker. Mr. Silver said he could not support a deal that could harm the district in Lower Manhattan that he represented.

(emphasis mine)

I doesn’t help that Amazon has stated that it will continue to aggressively sabotage any unionization efforts in the state.