[I]f you were a company looking to build a plant somewhere you’d be a fool not to play governors, mayors and other local elected officials against one another: All you have to do is promise to build a new (fill in the blank) that will generate thousands of jobs. You will be showered with incentives ranging from low-cost loans to tax abatements to regulatory waivers.
It is an unfair fight pitting naive local politicians facing re-election versus the experience of corporate executives, and their teams of lawyers, analysts and accountants. They dangle the very persuasive carrot of new economic development. It is the classic agency problem writ large. Taxpayers never stand a chance.
Well now Ritholz refers us to Business Week (not exactly the Worker's Daily):
Interviews with 49 people familiar with Foxconn’s Wisconsin project, including more than a dozen current and former employees close to its efforts there, show how hollow the boosters’ assurances have been all along. While Foxconn for months declined requests to interview executives, insiders describe a chaotic environment with ever-changing goals far different from what Trump and others promised. Walker and the White House declined to comment for this story, although a Trump administration official says the White House would be “disappointed” by any reduced investment. The only consistency, many of these people say, lay in how obvious it was that Wisconsin struck a weak deal. Under the terms Walker negotiated, each job at the Mount Pleasant factory is projected to cost the state at least $219,000 in tax breaks and other incentives. The good or extra-bad news, depending on your perspective, is that there probably won’t be 13,000 of them.Hey, I have an idea! Wisconsin can spend $3 billion to hire some teachers, social workers, public health workers, road pavers, solar power installers, nurses, librarians . . . . But that would smack of creeping socialism.