Headline of the Day

Study Shows Corporate Subsidies Only Create Jobs for Lobbyists

—Boondoggle on a study showing that massive subsidies to business generate jobs in only one industry.

Yeah, this is kind of a, "Well, duh!" moment.

The promise of corporate “economic development” subsidies is that they will create new jobs. Indeed, elected officials, government agencies, and the corporate executives that receive them all defend these public dollars flowing to private interests in the same way: As investments in local job creation and economic growth.

Research shows that this promise routinely isn’t kept. But a new study suggests that one industry does, in fact, see meaningful job creation from such subsidies: The lobbying industry.

Researchers Russell Sobel, Gary Wagner, and Peter Calcagno tracked data from more than 40,000 lobbying firms, covering all 50 states from 1997 to 2019. They examined what happened in a state before and after it handed out an “extraordinarily large” incentive — defined as a subsidy thousands of times bigger than that state had ever given before — and compared that to states that never awarded such an extraordinarily large incentive.

The study found that in the years after a state hands out its first extraordinarily large incentive, lobbyist employment in that state rises 3.6 percent on average. The effect is sharper in the state capital: In the five years following the incentive, lobbying firms in the capital county see employment gains of 4.5 percent relative to capital counties in comparison states. Additionally, lobbying’s share of the capital county’s private-sector workforce grew by 5.8 percent.

………

Separate research has found that firms that put more resources into the political process are more likely to land these incentives in the first place, suggesting the lobbying isn’t just a side effect of winning a deal, but a key part of obtaining it in the first place.

All of this sits on top of decades of research showing that these incentive programs generally fail to produce the job growth, income gains, or tax revenue they promise. Yet, that has not stopped states from handing out more of them: State governments now spend more than $40 billion a year on these incentives — three times what they spent in 1990.

Subsidies have always been a sucker bat.

You Mean that the Apartheid Era Emerald Heir Pedo Guy™ Overpromised Again

In news that surprises no one, Elon Musk’s Starlink is incapable of providing broadband connections to the mass market.

Sounds like solar shingles all over again:

A new study from researchers at X-Lab shows that Elon Musk’s Starlink satellite broadband service lacks the capacity to put a serious dent in U.S. broadband. Despite recent efforts by the Trump administration to rewrite a $42 billion subsidy program with an eye on giving Musk billions in taxpayer dollars.

The researchers found that given the limited nature of satellite physics, the more people that use Starlink, the slower the network is going to get. That’s not a surprise to users who have increasingly seen slowdowns on the network over the last four years, resulting in speeds that often don’t even meet the FCC’s fairly weak definition for broadband (100 Mbps down, 20 Mbps up).

The researchers estimated that pushing the network past any more than 6.7 Starlink customers per square mile results in significant slowdowns that will get worse. That’s why, they note, it’s a terrible idea for the Trump administration to redirect infrastructure bill grant money from more reliable (often fiber-based and locally owned) ISPs and instead give it to Elon Musk:

“Many State Offices are concerned that Starlink proposals may be the lowest bid and alternative proposals may not be within the 15% window for consideration. What this analysis presents is that across many geographic areas Starlink may not be a qualified bidder as it may be unable to attain the required 100/20 Mbps service level (and, in deploying Starlink services, may actually degrade pre-existing users’ services to the point that they no longer receive minimal broadband speeds).”

Saturation of the spectrum.  It's physics 101.

It is a consistent problem with wireless broadband. 

Headline of the Day

The True Genius of Elon Musk Is His Subsidy Harvesting Strategy, Political Science Professor Says

—Fortune Magazine

The Apartheid Era Emerald Heir Pedo Guy™ is the most egregious welfare queen in the nation.

Remember When I Said That Microsoft Wants to Reopen Three Mile Island?

I described Microsoft's plan to be the exclusive purchaser of the output from that plant as jumping the shark.

But it just got even worse, because the owner of the plant, Constellation Energy, is seeking government subsidies to restart energy production.

So now, it's not just Microsoft throwing money at the most notorious nuclear plant in the United States to power its misbegotten efforts in artificial intelligence, they want the taxpayers to subsidize this.

The owner of the shuttered Three Mile Island nuclear plant is pursuing a $1.6 billion federal loan guarantee to help finance its plan to restart the Pennsylvania facility and sell the electricity to Microsoft to power data centers, according to details of the application shared with The Washington Post.

The taxpayer-backed loan could give Microsoft and Three Mile Island owner Constellation Energy a major boost in their unprecedented bid to steer all the power from a U.S. nuclear plant to a single company.

Microsoft, which declined to comment on the bid for a loan guarantee, is among the large tech companies scouring the nation for zero-emissions power as they seek to build data centers. It is among the leaders in the global competition to dominate the field of artificial intelligence, which consumes enormous amounts of electricity.

………

The restart plan has already generated controversy as energy experts debate the merits of providing separate federal subsidies for the project, in the form of tax credits. Constellation’s pursuit of the $1.6 billion federal loan guarantee, which has not been previously disclosed, is likely to intensify that debate.

………

A loan guarantee would allow Constellation to shift much of the risk of reopening Three Mile Island to taxpayers. The federal government, in this case, would pledge to cover up to $1.6 billion if there is a default. The guarantees are typically used by developers to lower the cost of project financing, as lenders are willing to offer more favorable terms when there is federal backing.

And if Microsoft changes its mind in the years that it will take to reactivate the plant?  The taxpayers will be on the hook.

Taxpayers would be on the hook if difficulties or delays occur during the refurbishment of the plant, which are almost certain.

F%$# no.

Elections Have Consequences

The Bureau of Land Management has announced that it will end coal mining leases in the Powder River Basin.

Good.

The Bureau of Land Management announced Thursday that it would no longer make federally managed lands in Wyoming’s Powder River Basin available for new coal mining leases, drawing condemnation from the fossil fuel industry in the region that produces the most coal in the country, but delivering a boon to the nation’s clean energy transition.

The Powder River Basin, a geological formation that covers much of northeast Wyoming and a portion of southeast Montana, has been the nation’s largest source of coal for decades, with production there peaking in 2008. Since then, demand for coal has plummeted, largely due to the rise of natural gas and renewable energy. Taking federal coal off the table in the basin could all but put an expiration date on the nation’s thermal coal industry.

“This is a really critical, and frankly long overdue step that BLM has taken,” said Melissa Hornbein, an attorney at the Western Environmental Law Center, which was part of the legal team that represented several environmental groups in two legal challenges to the Bureau of Land Management’s previous resource management plans for the area.

Juxtaposing the large number of environmental issues from mining coal, as well as lease terms are more subsidies than they are a revenue source for the government, this is an unalloyed good/

Yeah, About those Subsidies

It appears that a fertilizer plant in Iowa, created with millions of dollars from the state of Iowa and the USDA in order to create a competitor to Koch Industries (Yes, those Koch Suckers) is being sold to Koch Industries.

Seriously, if you want to create competition through subsidies, make sure that the enterprise responsible for producing the product is owned by the government.

I know that this sounds like socialism. That's because because it is socialism.

The alternative to this is to keep throwing the surviving half of the Koch brothers piles of money.

To quote Emilio Estevez in Repo Man, "Fuck That!."

In 2017, the chemical company OCI Global opened a fertilizer plant in Iowa after a deal that was notable from the beginning. Pitched as an opportunity to introduce competition into the highly consolidated fertilizer industry, the goal of this new plant was to decrease fertilizer costs for farmers and food costs for consumers. As such, the project was heavily subsidized by taxpayers through state and federal tax breaks, loans, and grants.

Just six years later, however, we’re seeing Koch Industries — the very competitor the Iowa plant was built to challenge — acquire the plant. If the deal goes through, taxpayers will have footed a $550 million bill to build the Iowa plant only for Koch Industries to reap the rewards.

Since there were no safeguards established to prevent larger companies from acquiring the Iowa plant, this outcome isn’t surprising. Like all the giant corporations dominating our food and farm system today, Koch Industries is always looking for the next opportunity to tighten its grip on the industry by buying out smaller competitors.

As the government funds major investments to boost competition in the fertilizer, meatpacking, and seed industries, Farm Action has been sounding the alarm: Without proper safeguards, the billions of dollars the government is investing will inevitably end up in the hands of the dominant corporations they are trying to challenge.

Well duh.  Of course they will.

In fact, I would argue that this was probably the goal all along.

Both the Iowa Republicans and the USDA have their tongues so far up the rectums of big Ag that they are probably tasting tonsils.

Subsidies are a Sucker Bet

Even though they have repeatedly delayed breaking ground on their HQ2, it looks like Amazon will be getting $152 million in subsidies shortly.

There are supposed to be conditions that were met in order for them to get payments, but yadda-yadda-yadda Covid, or, to quote Goodfellas, "F%$# you, pay me."

Subsidies for development projects don't work, and they don't pay for themselves ever. Just look at the Foxconn plant in Wisconsin:

Amazon has requested its first round of economic incentive payments from Virginia for its new Arlington headquarters, a sum that could mean more than $152 million in state money paid to the tech giant by late 2026.

The state had committed to give Amazon up to $750 million for these new Northern Virginia offices, the first phase of which is set to open in June.

But no money has been paid out yet: The company declined over the past three years to seek out these performance grants amid the coronavirus pandemic, Amazon spokesman Zach Goldsztejn said.

The company’s application, which was submitted by an April 1 deadline, comes during a turbulent period for the company. Amazon has laid off tens of thousands of employees and announced last month that it would pause construction on the second part of its campus, including three office towers as well as a futuristic “Helix” just a stone’s throw from the Pentagon.

………

According to the contract, this is the final year in which Amazon can submit an application for this round of incentives. The payments reflect hiring and job creation through the end of 2022 and cannot be paid out until fiscal 2027.

These sorts of deals are never revenue positive.  They increase costs to the rest of the community and so have the effect of decreasing investment in the area.

It's a loser for everyone but the rich pigs getting the subsidies.

What Part of “Comcast” Don’t You Understand?

We don't care, we don't have to ……… we're Comcast

Gee, Comcast "customer service" agents are "accidentally" refusing qualified poor folks from federal subsidies.

It could be incompetence, but we are talking about Comcast, so it's safer to assume that this was driven by a malicious profit motive, because that is how they roll:

People with low incomes can get free Internet service through Comcast and a government program, but signing up is sometimes harder than it should be because of confusion within Comcast's customer service department.

Massachusetts resident Tonia Williams qualified for the US government's Affordable Connectivity Program (ACP), which provides $30 monthly discounts, and for Comcast's Internet Essentials Plus, a $30 monthly service for low-income people that is essentially free when combined with the ACP discount. But when she tried to use the ACP discount with Comcast's low-income service, Comcast incorrectly told her she wasn't eligible because she was already a Comcast customer.

Williams, a certified nursing assistant who was not working when she spoke to Ars, was eventually able to get free home Internet service for her family. But she faced several hassles and said she would have given up if it hadn't been for David Isenberg, a Falmouth resident who's been helping low-income people in his town navigate the process. Isenberg knew Williams because she was previously a home health aide taking care of Isenberg's wife's uncle.

………

The confusion is related to a Comcast rule that makes customers ineligible for Internet Essentials low-income service if they have been a Comcast subscriber in the previous 90 days. That rule and another one related to unpaid bills are not supposed to apply to people who also qualify for the federal ACP program.

Comcast can call it an error all they want, but it appears that their customer service representatives are forcing customers to jump through unreasonable hoops to get their lowest cost tier.

I am inclined to believe that this is not poor training, but rather a mandate to up-sell.

This Makes it Simple

Over at his podcast, Keith Olbermann, at around the 20:00 mark, he pithily explains how to show that taxpayer funded stadium deals are always a loser:

I once asked a sports economist to explain why all that is always true, and he could show me all kinds of complicated formulas, but there was something simpler, "If a new stadium actually made a profit, the owners would build all the new stadiums themselves with private money and keep all the profits.  That's what owners do."

This is all you really need to know about stadium deals.  If they made money, the owners would build their own f%$3ing stadiums.

When A Scammer Doubles Down on the Scam

In a rather self-serving interview, Alan Yeung, who was responsible for the Foxconn debacle in Wisconsin, provides some insight into how and why the deal came to pass, and why it failed.

The core reason is that government subsidies of private industries, whether it be abortive electronics plants, football stadiums, Amazon warehouses and headquarters, or the aforementioned Foxconn plant.

Nevertheless, this provides a useful insight into one of the more notorious failures of this fraud on the taxpayer:

Alan Yeung is a professor of entrepreneurship at the University of Wisconsin-Madison and the former head of the Foxconn project in Wisconsin.

If you don’t quite remember, the Foxconn project in Wisconsin was announced in 2017 as a massive deal to build the first “Generation 10.5” LCD factory in North America. It was also one of the first big moments in the Trump presidency, complete with President Trump holding a golden shovel at a lavish groundbreaking ceremony where he said the factory would be “the eighth wonder of the world.”

The deal was supposedly quite simple: Foxconn (the company best known for manufacturing the iPhone), President Trump, and Wisconsin Governor Scott Walker all announced that Foxconn would build a 20-million-square-foot display factory in Wisconsin that would bring 13,000 manufacturing jobs back to the United States. Wisconsin promised more than $4 billion in tax credits to Foxconn, cleared land by pushing people out of their homes, and diverted water from Lake Michigan to support the factory. A lot of people got excited about this promised American manufacturing renaissance and left good jobs to join it.

But it turned out that while Foxconn was putting on a great show, no LCD factory was actually getting built, even though Foxconn kept saying it was happening.

You can read the interview, but it basically comes down to, "Some people said nasty things about us, so we could not keep our promises.  (Spoiler, they never intended to keep those promises)

In particular, Mr. Yeung complains about Scott Walkers defeat as Governor as a turning point, which ignores the fact that the project has already been repeatedly downsized beyond recognition before his loss.

The efforts of both Walker and Foxconn to cover this up was a significant contributor to his being replaced by someone less friendly to the balderdash promulgated by the Taiwanese electronics giant.

Not This Sh%$ Again

The Simpsons are prescient

It looks like some grifters are looking for idiots to fund a high speed Maglev (Magnetic Levitation) train between Baltimore, Maryland and Washington, DC.

I like high speed rail, but the numbers for Maglev do not make sense.

If you assume a top speed of wheel driven locomotives of 300 km/h (the French TGV has reached 320 km/h) and the top speed of a Maglev is 450 km/h (the Chinese Maglev is anticipated to reach 430 km/h), then a trip from Baltimore to DC (60 km) will take only 3½ minutes more with high speed rail (00:12:42) as versus Maglev, (00:09:02).

For DC to New York City (350 km), it's 01:10:42 (HSR) vs. 00:47:43 (Maglev) non stop, just under 23 minutes more.

As an FYI, I am assuming an acceleration of 2m/s2 which would equates to a 0 to 60 mph time of about 13½ seconds, which is reasonable and each additional stop reduces this advantage by 31 seconds for both distances.

Neither project is cheap, both would required the construction of a new railway, but both the tracks and the rolling stock for a Maglev are many times more expensive.

Maglev only makes sense in the context of national vanity projects, and given the state of US rail, we are decades away from being able to brag about anything involving railroads.

You can see my calculations here.

Cuck Fomcast

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)

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

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 Simple Answers to Simple Questions

Why Do Taxpayers Subsidize Rich Farmers?

—The Washington Post

Because the poor ones cannot afford to make large campaign donations.

If you have to ask, you can't afford it.

Today in Wicked Bad Ideas

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

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

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

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

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.”

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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.

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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.

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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.