Selling Foxconn after the sale

Right Wisconsin reports:

Speaking to the Independent Business Association of Wisconsin (IBAW) Manufacturing Summit in Milwaukee on Friday, Department of Administration Secretary Scott Neitzel took the opportunity to address some of the concerns of the critics of the Foxconn legislation that recently passed the legislature.

Neitzel addressed the question of what happens if Foxconn does not follow through on its promise to create a $10 billion manufacturing facility in southeaster Wisconsin. “The state isn’t just going to issue them a check for $3 billion,” Neitzel said. “The way the $3 billion is given out, it’s over time, over a 15 year period.”

“Part of it is the capital investment, which is $1.35 billion,” Neitzel said. “$1.5 billion is based on employment, about $150 million is just a sales tax exemption for construction materials while they’re building it.”

The tax credits will only be given as Foxconn reaches the capital investment and employment targets in the agreement with Wisconsin.

“It grows as they grow,” Neitzel said.

The project is expected to create 10,000 construction jobs for the project and will create as many as 22,000 “induced jobs” from the economic activity statewide. The facility will hire 3,000 permanent employees to start, with growth of up to 13,000 permanent jobs. One estimate has the state receiving $3.90 for every $1 invested by the state. Once completed, the Foxconn development could have a $7 billion annual impact on Wisconsin’s economy.

Neitzel said from a personal perspective, the people that the Walker Administration dealt with were completely sincere in their dealings with Wisconsin. “They continue to work with the local communities,” Neitzel said. “They are talking to people about how they can integrate themselves into the community. They are making a commitment for the long term.”

In answer to the concern about how long it will take before the state “breaks even” on the investment, ” Neitzel said, “Government doesn’t usually spend money to make money.”

“Under the most, what I would call, conservative estimate, it breaks even the fiscal bureau said in 25 years,” Neitzel said. “What do we get for that from a society perspective?”

Neitzel said the Foxconn deal will create “high-paying, family-supporting jobs.”

“Another thing we want, is we want to give our best and brightest a reason to stay in Wisconsin,” Neitzel said. “We want to attract the best and brightest from around the United States and around the globe to come to Wisconsin.”

The new Foxconn manufacturing campus will also spur entrepreneurial activity and small business growth, according to Neitzel. It will also bring more venture capital to Wisconsin.

“With Foxconn here, the venture capital community now has Wisconsin at closer to the upper tier than we have ever been,” Neitzel said. “That’s a good public policy objective.”

Neitzel praised the legislature for improving the Foxconn bill before they passed it.

“It went to the Assembly. They made changes. They were all improvements,” Neitzel said. “That bill then went to the Senate. They made changes. They were all improvements. The bill that is before the governor, which he will sign soon, is a very, very good bill.”

“[The bill] allows us to accommodate Foxconn and to protect the environment and to make sure that the taxpayers of Wisconsin are protected,” Neitzel said.

Neitzel said that opponents of the Foxconn legislation are treating the development as just another manufacturing facility. “What it really is, is bringing a whole new industry to North America and planting it right here in Wisconsin,” Neitzel said. “So the whole supply chain has to come with Foxconn. They have to create a supply chain in North America and in Wisconsin.”

For example, Neitzel said, wherever the plant is built, there will have to be a glass plant right next door.

 

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Park this in the back of your mind

Michael Cizek:

There is a silent movement happening all over the country. It largely goes unnoticed because of its simplicity, but it has a dedicated following. The movement? Backing your car in.

It may sound simple, but backing your car can say a lot about the person who drives it.

Ever since I was sixteen, I’ve backed my car in because that’s what all the “car guys” at school did. But in parking this way for years, I’ve learned that it’s not just cars guys who should back in—leaders should back in. Why? Leaders are called to vigorously plan, do what is best for others, and be confident in themselves—actions that are taken when backing your vehicle in.

By backing your car in, as a leader you will learn how to…

Plan for the Unknown

When I finally find a spot in a busy parking lot (bonus points if it’s close to the entrance), I pass it first to see if the spot is clear of pedestrians and shopping carts. I can then back into a known situation. When it’s time to leave, I can fully see my surroundings and safely pull out instead of backing into unknown traffic. Choosing to back in (planning) alleviates risk of a collision (failure).

Whether it’s parking or leading others, the best leaders understand the importance of planning. The first three habits in The 7 Habits of Highly Effective People by Stephen Covey describe planning:

1.     Be Proactive (Don’t wait to react to problems, but be proactive in planning ahead to avoid them)

2.     Begin with the End in Mind (Envision your future and make everything you do revolve around getting you there)

3.     Put First Things First (Know each task’s importance and urgency, and spend your time only on the highest priority tasks)

Planning keeps everyone working towards the same goal, alleviates misunderstandings, and maximizes efficiency. By backing in, leaders have successfully planned for an unknown future parking lot situation.

Provide Safety for Self and Others

In the Midwest winters after WWII, the wisest drivers would back in. If the battery died in the sub-zero temperatures, it was safer and easier to jump the car with the engine facing the street.

But cold weather isn’t the only prime time to back in. The National Highway Traffic Safety Administration found that accidents involving cars backing into traffic, known as a backover collisions, account for an estimated 18,000 injuries and 292 fatalities annually. This happens backing out of both parking spaces and driveways.

When driving a vehicle, you are charged with the safety of others in and around your vehicle. When leading a team, you are charged with the safety of those in, and impacted by, your team.

Maslow’s Hierarchy of Needs states that basic human needs must be met before being able to focus on higher needs. One basic need is safety. If the people we lead do not feel safe, we cannot expect them to perform. We must make sure that our team feels safe in all aspects of life: physically, mentally, financially, socially, and spiritually. For example, discussing personnel issues in a private environment provides safety from embarrassment, while praising team members publicly provides job security.

Backing in keeps you and everyone around you safer—an action every leader should take.

Grow in Self-Confidence

When I catch a ride with a friend, I’ll sometimes give them a hard time when they park head-in. The common response is that backing in is too difficult. The ironic part? It is often more difficult to back out of a space safely than it is to back in. Most people simply lack self-confidence, but their driving abilities fully enable them to back in.

If we can’t lead ourselves, how can we be expected to lead others?

What if we decided to have confidence in our abilities?

To become more self-confident, I say “we will” not “we will try to,” practice being comfortable with the uncomfortable, come prepared, and do what I say I’m going to do. If all else fails, I fake it ‘till I make it.

Having confidence in your ability to lead (park) will give you the ability to overcome adversity (back in).

The Bottom Line: Intentionally backing your car in might sound trivial, but it showcases leadership. Backing in shows that you are a planner, put others before self, and are confident in yourself.

This is also the sort of thing firefighters and EMTs, or prospective firefighters and EMTs, do.

Of course, there’s always a cynic in every crowd, shown in this Facebook comment:

“…(bonus points if it’s close to the entrance)…” ~ why? Because “leaders” are lazy SOBs? You wanna be a leader, park farther away and walk. Set a better example than the clowns who spend 5 minutes driving around, looking for a spot 50 feet closer than all the empties farther out. Also, by doing that, you don’t have to mess around with backing in or out and delaying the cars around you. You can pull through 2 spots and already be in position to just pull straight out.

Now THAT’S leadership and planning.

… and someone who may or may not be kidding:

I back in for one reason: so that I can make a fast get-away (just because I’m paranoid doesn’t mean that people aren’t really after me)

 

As journalism sinks into the abyss …

Brigham Young University may not be known as a powerhouse journalism school. But given the state of journalism these days, that’s not necessarily a bad thing.

In fact, BYU Magazine has interesting insights from its faculty and alumni about the state of journalism today from a more, well, flyover-country perspective than the navel-gazing you’re likely to read from the sophisticates on the coasts:

Journalism has a lofty goal—one epitomized by the career of R. John Hughes.

The emeritus BYU professor won the Pulitzer Prize in 1967 for his coverage of an attempted communist coup and its bloody aftermath in Indonesia. Over his career as a writer for and then editor of the Christian Science Monitor, he covered revolutions and interviewed world leaders.

“Journalism was almost like a religion to me, to get the story, and get it right, to help evince change,” Hughes says. “It’s a kind of love affair for most journalists, shining light in dark corners.”

Journalists call themselves the watchdogs, the truth seekers. The press is dubbed the Fourth Estate after all, the final check on all three branches of government. Democracy requires informed citizens; the press make up the informants. “Democracy Dies in Darkness” goes the new Washington Post tagline.

That’s the why of modern journalism.

The how—being objective, non-partisan—“is rather a new phenomenon in the history of news,” says Campbell.

It has always depended on who’s paying.

Wealthy traders and merchants underwrote the first news in the Americas, and it was all route intel. In the colonial period political parties footed the bill for most papers—party organs that were far more partisan and acrimonious than what we cry foul at today. It wasn’t until the penny-press era—the 1830s on—that a new funding model developed: scale up the circulation, then sell readers’ attention to advertisers. That advertising revenue could bring the cost of the paper down to something many could afford.

Writing to a mass audience, publishers began to recognize there was a market for real, honest news that could cross political divides and speak with a relatively neutral voice. This paved the way for professional journalism standards. And for most of the 20th century, it made newsrooms the information power brokers.

Then the internet smashed the model.

“For the last decade, we have seen a steady erosion of the advertising economy for newspapers,” says Campbell. That’s the nice way of saying it. Revenue streams have been gutted.

Department stores and auto malls, the go-to advertisers, cut back on ads, facing their own disruptions: e-commerce competition and recession. Craigslist happened to the classifieds. And reader eyeballs, once concentrated among a few media outlets, are now diverted to Facebook, YouTube, and that thing you just Googled—and the bulk of advertising has followed them.

As they say in the industry, the digital transition traded print dollars for digital dimes and, in turn, digital dimes for mobile pennies.

One thing is certain: it’s a fascinating time to study the news. Alum Seth C. Lewis (BA ’02) holds the Shirley Papé Chair in Emerging Media at the University of Oregon and is a leading scholar on the digital transformation of journalism.

“We’ve gone from media monopoly to media disruption and ubiquity,” says Lewis. And in ubiquity, no one gets a sizable piece of the economic pie.

Lewis suggests that maybe the last century of advertising-based news subsidy—which fostered these objective, non-partisan notions—“was just a happy accident. Maybe instead we’re returning to other forms of funding and thinking about the news.” …

Jon M. Du Pre (’85), anchor of ABC’s KTBS 3 in Shreveport, Louisiana, used to pass a day creating stories for the 6 and the 10 o’clock news. Now it’s the 4, 5, 6, 9, and 10 o’clock—plus posting on five digital platforms and Facebook Live-ing throughout the gathering process.

“It’s sometimes physically impossible to . . . feed all those beasts,” he says. It’s the hardest job he’s had in 32 years in TV.

Gone is the production cycle where a reporter would work on a story all day, turn it in, and see it published the next morning. Event coverage has to be up immediately, even if it’s just three paragraphs, the rest written via updates.

Accuracy—or, at the very least, thoroughness—has become a casualty, contends Lewis. “You cannot have your news instantly and have it well done,” he says. “More content created by fewer people makes the likelihood for mistakes and problems greater.”

That’s the story at the news organizations that still exist. Countless others have been forced to close.

The hardest hit: local news, the most important news, in Campbell’s eyes. “That’s where we need watchdogs,” he says—most government money is spent locally.

“We’ve moved from deathwatch to life support,” Campbell says of the local-news survivors. Yet the equation remains: “To do in-depth—to give it context, to really understand a community—costs money.” The budgets for watchdogging, more and more, don’t exist.

And then there’s lost turf. A majority of Americans now get news from Facebook and the like, making social-media giants the new gatekeepers and distributors. In addition, the boundaries of the journalism profession are blurring: anyone with a Twitter account can disseminate news, and institutions of all sorts now post their own articles rather than leave their narratives to the press.

Lewis says this leaves consumers wading through an overabundance of sources. “News now populates spaces you might not have expected, and we haven’t really understood how to interpret news we see in those places. This has led a lot of people to throw up their hands and tune out, to say, ‘Because I can’t trust much of what I see, therefore I can’t trust anything.’”

Americans once took in news by appointment—making time for it at the breakfast table or watching the evening newscast before bed. Appointment reading fostered breadth—maybe a baseball story caught your eye, but you got bits on Iran and EPA regulation along the way.

“That used to be a great function of newspapers, the serendipity of falling into something,” says Edward L. Carter (BA ’96, JD ’03), director of the BYU School of Communications.

News consumption now is largely incidental. We seek it out less; our attention span for it is shorter. On a given day, it may be reduced to what pieces of journalism are trending in our social media streams. “And the stories that catch on social media are different,” says Sarah Cannon Weaver (BA ’94), editor of the Church News.

Incidental consumption online pits the news against the juggernauts of Internet clicks: cute babies, cat videos, and all the other stuff Facebook has deemed “news” to you. There have always been things competing for our attention—but never so many on one screen at one time.

In the fight to be heard, journalists now turn to search-engine optimization (SEO)—tagging every story with its most trend-worthy terms. They bend stories into clickbait.

It’s a trend that can’t be ignored, says D. Hunter Schwarz (BA ’12), coauthor of CNN’s Coverline, a politics–pop culture mash-up. “Your average person is not watching a bill progress,” says Schwarz. And so his newsletter and podcast weave Britney Spears and the Kardashians into the political coverage.

Because of the all-mighty click, story selection and presentation are changing: newsrooms are increasingly chasing the stuff we like.

“It’s eye-candy journalism,” says Campbell: sports, “list-icles,” the slideshow of 10 things. “The eyes stay with them a long time. They make money.”

It’s celebrity anything, says alumna Marti Johnson, a freelance reporter for the Associated Press and a C-SPAN announcer. “[Americans] just hoover up information on celebrities.”

Whatever it is, it represents a seismic shift in journalism. “We’ve gone from where news editors selected what they wanted the public to see to where now the public says, ‘No, this isn’t what I want to read about,’” says Weaver. “You can’t make people interested in city council. . . . We can’t thrust it upon them the way we used to.”

Further complicating the news mix: the fact that most traditional news outlets are now owned by publicly held corporations—companies that answer to stockholders. “They care about profit,” says journalism professor Dale L. Cressman (BA ’85, MA ’89), “not news.”

Advertisers can see in real time exactly what catches the audience’s eye, putting the press at the public’s mercy.

There’s no other way to say it, says Campbell: “SEO and analytics are driving a stake into the heart of journalism.”

Suspend the question of media bias for a moment (we’ll get there) and allow the journalists to turn the table:

“Are the consumers of the products we produce biased?” asks Du Pre.

At least on this point—in an America more polarized politically than at any point in recent history—the answer is clearly yes.

Du Pre says that no matter how straight the attempt, there is no longer a news topic that isn’t a lightning rod. “You do a story on crime, it turns into a political debate,” he says. “The environment? Political debate. Health? Somehow, it turns into a political debate.”

Meanwhile, for news outlets desperate for traffic to translate into ad revenue, polarization creates tempting target audiences.

“Some practitioners of journalism . . . have taken to an entirely different business model,” says Du Pre. “And that is ‘Which audience do we want to seek out?’”

Fox News, for example, set up shop as an alternative to mainstream media. A slew of outlets have taken root on the left and right. Where there used to be just a handful of TV and radio broadcasts, newspapers, and magazines driving the national news agenda, there are now scores of websites, each trying to carve out a niche and then pander to it relentlessly. For Fox and MSNBC, it seems to pay the bills.

This model is reinforced by—and fuels—another internet phenomenon: the echo chamber. The term describes how, in our online worlds, we are interacting more with the information we like and less with information that challenges us.

McKay A. Coppins (’10), who covers politics for the Atlantic, says many aren’t even seeking truth anymore—they’re seeking confirmation of their beliefs. “They can kind of ensconce themselves in an information and media bubble where that’s all they hear,” he says. “Whatever little media bubble you’re in is telling you the rest of the media is wrong.”

Some of this selective credulity is deliberate: readers tend to pick media teams and loyally drown out other news sources. Some of it, however, comes courtesy of social media and search engines, which get to know you better with every click. Based on your interests, views, and likes, Facebook algorithms serve up your Daily Me.

On your streams there is no equal airtime for different views. “These systems we interact with really have no function for saying, ‘Maybe that’s enough extremism for you today,’” says Lewis.

Research is digging into the effects of the social media echo chamber: we share stories without reading more than a headline, place more trust in who is sharing the story than who produced it, and clearly give our time to stories that reinforce our own views. …

The First Amendment is pretty clear that all can have their say, agree the experts. Carter says, “At BYU we teach the ‘marketplace of ideas,’”—the philosophy that embraces discordant voices under the premise that the best ideas rise to the top. “The function of journalism is to help us sift through them.”

But he says there’s a catch: “The marketplace ultimately depends on the wisdom of the people, that they won’t be deceived.”

It would be easier if bias were found only at outlets with an obvious bent. Bias seeps in across the board, in varying amounts, concede our experts.

But, they caution, it’s not as one-sided as we might think.

The claim that the mainstream media are liberal, says Cressman, first gained traction in the civil-rights-era South. “Southerners did not like national media coming in and reporting on segregation.” The liberal-media accusation was lodged then—and countless times since. More journalists identify as Democrats than as Republicans, says Cressman (though even more identify as independent). But he suggests that what is judged as bias may be merely core journalistic values.

“Part of journalism’s ethos is giving voice to the voiceless, afflicting the comfortable and comforting the afflicted,” Cressman says. “Those can be perceived as liberal ideas.”

Also at play, says Coppins, are cultural and geographic biases. With the collapse of newspapers nationwide, there’s been a sort of coastal-ization of news; the national news, especially, is made in urban enclaves. “Readers and viewers increasingly don’t see their values represented,” says Coppins. “They increasingly feel like they are getting news from people who are sort of outside their world, and it can often feel condescending and patronizing.”

The quality of reporting in the mainstream media ultimately comes down to the individual reporter, says Campbell. And while the goal is to pursue truth as objectively as possible, our experts say journalists can’t help but approach the truth with their own predispositions.

“The whole idea of journalistic objectivity is a false god,” says Coppins. “No human being is truly objective.”

Though journalists cannot be impartial, their methods, like the scientific method, can, says Cressman. Through a rigorous discipline of verification and transparency, a consistent method of testing information, journalism can uncover not just facts, but the truth.

“The best we can do,” says Du Pre, “is practice journalism as best we can, telling every story in a way that’s true to the facts and fair to the people involved and the people who are impacted by that story. And then hope there are enough people who are enlightened enough that they recognize it when they see it—and then they demand it.”

OutFox(conn)ed

The Chicago Tribune editorializes:

Illinois recently got a humiliating rejection notice from Foxconn, the Taiwanese tech giant. Foxconn picked Wisconsin over struggling Illinois and other states for the proposed site of a $10 billion LCD panel factory that will employ up to 13,000 people. These mega-projects don’t happen every day, so Foxconn’s decision hurts because job growth is the only way to solve Illinois’ fiscal crisis: More jobs means more tax revenue.

What really stings, though, is how the winning site is just across the state line in southeast Wisconsin. It’s as if Foxconn settled on the Midwest as a location and then decided: We want to be as near as possible to Illinois without actually being there.

Foxconn Chairman Terry Gou gave an interview to Steve Jagler, the business editor of the Milwaukee Journal Sentinel. Gou gave Jagler eight reasons why Foxconn chose Wisconsin. Two of them were — literally — proximity to Illinois: First, Wisconsin is conveniently located in the central U.S., “close to Chicago, a global hub,” the Journal Sentinel reported. Second, Wisconsin has the transportation and logistics to accommodate Foxconn’s growth, and is … near O’Hare International Airport. Feel free to smack your forehead.

Now play along as we study more of Foxconn’s list of Wisconsin attributes to see how many also match Illinois. A manufacturing mecca? Yes, that’s Illinois, too. Strong university and technical college systems? Yes. Energy reliability? Yes. Proximity to Lake Michigan water supply? Well, duh. Foxconn also likes Wisconsin because it’s home to allied companies such as Rockwell Automation, but Illinois is just a quick drive south.

The final reason Foxconn picked Wisconsin over Illinois is the difference-maker: government cooperation and competence. The Journal Sentinel wrote that Gou believed “the responsiveness of the public and private partners in Wisconsin far exceeded those of other states.” Gou singled out the cooperation of Gov. Scott Walker, U.S. House Speaker Paul Ryan, R-Wis., and local business groups: “These key people pushed very hard.”

In other words, Foxconn liked everything about Illinois, but Wisconsin officials convinced Gou they made the best business partners. How could that be? Wisconsin will provide $3 billion in tax benefits over 15 years, but incentives are the norm and Illinois, one of seven finalists, was willing to offer some. National politics could have been a factor, given that Foxconn would benefit from pleasing President Donald Trump, who hopes to win Wisconsin again in 2020. But companies don’t make huge investment decisions just to make a president smile.

Here’s the takeaway: Foxconn chose the state that has stable government, healthy finances and pro-growth policies for employers. Illinois has none of the above.

This state is deep in debt and badly run. A 10-ton anvil dangles overhead in the form of at least $130 billion in unfunded pension obligations. Taxes are too high, yet Illinois still can’t pay its bills on time. Republican Gov. Bruce Rauner recognizes that Illinois isn’t competitive. He wants to cut onerous regulations and make other reforms to attract business investment, but he’s been stymied by House Speaker Mike Madigan, Senate President John Cullerton and their Democrat-controlled General Assembly.

None of this is secret. Business leaders looking to invest see Illinois, with its worst-in-the-nation credit rating and embarrassing Springfield stand-off that left the state without a budget for two years, and they cross Illinois off their lists. They don’t trust Illinois government and don’t want to be paying taxes here when the day of reckoning comes for the pension crisis.

Larry Gigerich of Indiana-based Ginovus, a site-selection firm, tells us Illinois will continue to miss opportunities until it stabilizes its public finances. Political leaders also will need to convince investors that tax increases and other necessary pain will be temporary, lest they scare off business permanently — and residents, too, we’d add.

But to accomplish anything, Gigerich notes, Illinois officials can’t continue to undercut each other. “It looks like the legislature and leadership are just trying to run the clock out until the next election,” he said. “People don’t think that is the right way, or a sophisticated way, of running government. And that has really hurt with chief executives looking at Illinois, saying, ‘There is no adult in the room’.”

Nevertheless, Wisconsin liberals persist in opposing Foxconn. To them, Facebook Friend Tim Nerenz writes:

If someone cannot grasp the difference between allowing a person or a firm to keep what they have earned (the tax credit) and taxing more from one person to give money to another (the way she describes it), they should not be allowed to display such ignorance as a feature columnist in a prominent paper. If Foxconn goes forward or if it is struck down by a Dane County judge it will not cost Emily a penny or save her a penny respectively. What it will do is provide up to 13,000 people who do not write ignorant columns for the MJS with the opportunity to earn an average of $54k and bring additional international investor attention to Wisconsin and add many billions in new tax revenues – even after the credits have been applied. What is troubling to Wisconsin’s progressives is that something good is being done in spite of them, and with private capital over which they have no control and which was not confiscated from rich Republicans in the suburbs.

Nerenz recalls the incentive package given to the Italian owner of Marinette Marine:

… former Governor Jim Doyle … gave Italian shipbuilder Fincianterri Marine (Marinette) $50 million in refundable tax credits for a $100 million investment in 2010 and here is how it was reported : “The company would receive the state tax credits only as it makes its own plant and personnel investments, which could reach $100 million, Doyle said. ‘Nobody’s handing over $50 million in cash.’ Doyle credits 50% of a foreign investment – good. Walker credits 30% of a foreign investment – bad.

 

Why Wisconsin needs more billionaires

The New York Times writes about Beloit’s Diane Hendricks:

When Diane Hendricks sees something she doesn’t like here, she buys it.

A bankrupt country club. A half-empty mall. Abandoned buildings. The rusting foundry down by the river.

Beloit used to be a town that made papermaking machines and diesel engines. Ms. Hendricks thinks it can be a place where start-ups create the next billion-dollar idea, and she is remaking the town to fit her vision. She can do so because she is the second-richest self-made woman in the United States, behind only Marian Ilitch of Little Caesars Pizza, according to Forbes magazine.

“I see old buildings, and I see an opportunity for putting things in them,” says Ms. Hendricks, 70, who got her start fixing up houses here as a single mother and made her billions selling roofing felt, copper gutters and cement with her late husband, Ken.

Now Ms. Hendricks is fixing up Beloit.

She took the library from its historic location downtown and resurrected it inside a failing mall at the edge of town, replacing the original with a performing arts center where dance and music students from Beloit College can study and perform each year. Then she scooped up nearly every building on a downtown block and knocked each one down, making way for a sushi restaurant, a high-quality burger joint and modern apartments with marble countertops and exposed-brick walls.

She called the complex the Phoenix. “It looks like we’re beautifying the city, but we’re really beautifying the economy,” she says, casting her piercing blue eyes out of the window of her office in Ironworks, the old foundry complex she converted into a commercial space.

She has wooed several start-ups, persuading them to set up shop in the old foundry building — one with the help of Wisconsin’s governor, Scott Walker, who personally called the co-founders on her behalf.

Ms. Hendricks, a major Republican donor, was briefly thrust into the national spotlight a few years ago when she was recorded asking Mr. Walker to break up the labor unions. He then introduced a bill limiting the ability of public workers to bargain over wages. In response, protesters occupied the halls of the Capitol for weeks.

Not long ago, Beloit’s economy was ugly. Like many American cities — Detroit, Youngstown, Gary — it had fallen victim to the damage that is wrought when one major industry vanishes from town, reversing local fortunes.

Beloit is different today. That’s because this town of nearly 37,000 has a billionaire who has gone to great lengths to help it turn a corner.

In a nation with countless struggling towns and small cities, Beloit is not a model for economic revival that is easily replicated, although a few others have tried.

In Kalamazoo, Mich., a group of well-to-do town “elders” pay for every public school student in town to go to college. And Columbus, Ind., has become an architectural mecca thanks to the support of J. Irwin Miller, whose family made its riches manufacturing engines.

Ms. Hendricks’s project has not been cheap.

Buying and fixing up the foundry alone has cost Ms. Hendricks around $40 million, according to Rob Gerbitz, the president and chief executive of Hendricks Commercial Properties. The Phoenix complex has cost $7 million (with a $1 million assist from the city).

And, of course, money doesn’t solve everything. Ms. Hendricks’s overhaul faces challenges big and small, including skepticism. Early on, some residents joked about giving the city a new name: Hendricksville. Unemployment remains stubbornly high, as does poverty.

Her activities on Beloit’s behalf are complicated by the fact that not everyone agrees with Ms. Hendricks’s political views. She was an early supporter of Donald J. Trump’s presidential campaign here in Wisconsin, a state with a history of progressive politics, and that has pitted her against some current and former students at Beloit College, a liberal arts school and one of Beloit’s other big employers. (Ms. Hendricks sits on the college’s board of trustees.)

“Diane Hendricks is the most powerful woman in Wisconsin,” says Charlie Sykes, a former talk-show host in Milwaukee.

In Beloit, she’s so influential that some worry about what would happen if someday she walks away. “Will the kids take over?” asks Rod Gottfredsen, a local barber, referring to her seven adult children.

Mr. Gottfredsen has had a front-row seat to Beloit’s travails for nearly 40 years. He’s been cutting hair and trimming beards since 1978, when he took over Austin’s Barbershop on one of Beloit’s main streets downtown.

On a clear June day, one of Ms. Hendricks’s sons, Brent Fox, is in his white Ford Super Duty truck driving through the lush tree-lined streets around Beloit College. This is the neighborhood where Ms. Hendricks and her husband got their start a half-century ago, buying and fixing up homes, in the 1960s.

“Mom wanted me to show you these,” Mr. Fox says as he stops outside two Craftsman-style homes where trucks marked CCI, a Hendricks-owned construction company, are parked. “One of the biggest problems we find is suitable housing stock, so we decided to buy old, stately houses,” says Mr. Fox, who is also the chief executive of Hendricks Holding Company.

“As long as we can break even or make a dollar, we’ll keep doing it,” he adds.

Mr. Fox drives north, past Beloit’s industrial sites, through the town’s history. The red roof of ABC Supply comes into view, overlooking Beloit from a slight hill. When the Hendrickses bought the property in the 1990s, it was an abandoned factory that had once made diesel backup engines for military submarines.

We pass the Eclipse Center, which in its heyday in the 1960s was the biggest mall in Rock County. By the 1980s, it had become better known for a notorious double murder at the Radio Shack. The place was half empty when the Hendrickses stepped in.

He stops at the Beloit Club, a beleaguered country club near the Rock River, which cuts through the town. Ms. Hendricks bought it several years ago, possibly saving the club from an ignominious fate as a gravel pit.

“From a business perspective, it was a horrible decision,” he says of the purchase. But if Beloit was to be reimagined as a modern city, the thinking went, it needed a club for golf.

Beloit’s Hendricks-fueled revival happened largely by chance.

Ms. Hendricks grew up 200 miles away from Beloit, on a dairy farm, with eight sisters. As a child, she yearned to work outdoors on the farm, but her father forbade it. A surprise pregnancy at 17 and her short marriage to Mr. Fox’s father brought her to Janesville, to work briefly in the Parker Pen factory, where women assembled fountain pens.

Soon she divorced. She had to find a way to support herself on her own, as a single mother. She switched to selling real estate, and had gotten her broker’s license by the time she turned 21.

Before long, she had found a business partner, a roofing contractor who had dropped out of high school, named Ken Hendricks. Together the two bought old houses in Beloit, fixed them up and rented them out. They married in 1975 and moved on to buying industrial spaces at around the same time. They found a rundown sugar beet plant in Janesville, 20 miles up the road from Beloit.

When Mr. Hendricks went to a Janesville bank to finance the purchase of the plant, he was turned away. “The banker said, ‘We don’t do business with entrepreneurs, and we don’t want your business,’” Ms. Hendricks recalls.

It was a turning point. The couple turned their backs on Janesville, focusing instead on Beloit.

They would move from renting local apartments to starting ABC Supply in 1982, buying up distributors nationwide.

Beloit at the time was on the cusp of a steep decline after successive economic blows, among them the grinding to a halt of Fairbanks Morse, a diesel engine maker and a onetime major employer.

Like struggling cities and towns across the country, Beloit went through a period of Band-Aid-like efforts. By the 1980s, local businesses were petitioning the city to change its image by cleaning up the riverfront, where vacant stores sat along the banks of the river, and by reviving the withering downtown. The initiatives barely made a dent.

Into the 1990s, at least, the town still had its foundry, Beloit Corporation, by that time owned by a Milwaukee company, Harnishfeger Corporation. At its height, Beloit Corporation had employed more than 7,000 people building papermaking machines. Late into the night, the flickering light from the welding in the foundry would light up the Rock River.

In 1999, the foundry went bankrupt, leaving behind an empty, sprawling complex the size of 15 football fields. Beloit’s downtown became a bleak landscape of “decayed, bombed-out buildings,” recalled Jeff Adams, who moved to Beloit to teach economics at Beloit College in the early 1980s and was involved in early initiatives to try to fix the town.

But if Beloit was sinking, the Hendrickses were riding high. Their business was booming, and they saw opportunity in the desolation.

One day, a few years after Beloit Corporation went bust, the two were riding their Harley-Davidsons past the abandoned factory and noticed someone wandering around the property. They stopped to ask what he was doing. The man, Samuel Popa, turned out to be looking for a place to put his aluminum business.

On a whim, the Hendricks decided to buy the 800,000-square-foot building. They knew it had the potential to one day become commercial space, perhaps residential, too. They ended up becoming a partner in Mr. Popa’s company, American Aluminum Extrusion.

Next, they bought the old mall on the edge of town, which they planned on turning into “a community and civic center,” Ms. Hendricks says.

Around the same time, Ron Nief, the director of public affairs at Beloit College, and two of his friends had an idea that in almost any other dying industrial town would not have gotten out of the starting blocks: Let’s start an international film festival.

They approached Beloit’s billionaire benefactors about the idea, and in 2006, the festival opened on a frigid Wisconsin weekday in January.

Despite the fact that its debut occurred the same week as the much more famous Sundance Film Festival, it has thrived. Jon Voight, Melissa Gilbert and David Zucker, the director of “Airplane!,” have attended

Mr. Nief recalls a conversation with Mr. Hendricks, who had told him to aim high with the film festival idea. Mr. Nief said to him, “It needs to be special, but it doesn’t need to be, say, the Toronto Film Festival,” referring to the giant on the festival circuit.

“Ken said: ‘Why not? Why don’t you want to be the biggest and the best in the world?’” Mr. Nief said.

But tragedy struck one evening, just days before Christmas in 2007. Mr. Hendricks fell through the roof of his home after inspecting some renovations; he died from the injuries.

Mr. Hendricks’s death led residents in Beloit to worry that Ms. Hendricks would sell ABC and abandon the couple’s efforts to revive the town.

Then came the 2008 economic crisis. Housing and construction, the very businesses on which the Hendrickses’ fortune had been built, suffered through one of the worst downturns in decades.

ABC pulled through, and grew in part by buying its biggest rival, Bradco. Today ABC is a private company and the largest wholesale distributor of roofing, windows, siding and gutter materials. It has 715 stores across the United States and employs 656 people in Beloit alone.

Ms. Hendricks also began putting to use the industrial buildings that she and her husband had bought over the years. She turned the foundry into a commercial space with high ceilings, dubbing it Ironworks, and turned to a political ally, Mr. Walker, to help attract at least one tenant.

The move worked.

“I had 17 employees at that moment, and the governor of Wisconsin told me my business mattered to him,” recalled Kerry Frank, the co-founder with her husband, Dude Frank, of Comply365, which makes software used by airline pilots to complete their flight paperwork. Started in the Franks’ basement, the company is now housed in Ironworks and counts Southwest Airlines among its biggest clients.

In 2011, after Illinois created a new law to collect sales tax from online shoppers, the Rockton online coupon company FatWallet needed to find a Wisconsin town for its headquarters. Ms. Hendricks worked with the city to make Beloit, just over the state border, FatWallet’s first choice. The company is now based in Ironworks.

“The advantage here in Beloit is that the same type of engineer that you hire in Silicon Valley can have a large house,” says Ryan Washatka, general manager in Beloit for Ebates, FatWallet’s parent company.

Still, few people in the start-up world outside of Wisconsin know much about Beloit. It certainly was not on the radar of Chris Olsen, a former executive at Sequoia Capital, the Silicon Valley venture capital firm, whose Ohio venture capital firm Drive Capital is now one of Comply365’s biggest investors.

After several airlines told him to look at Comply365, Mr. Olson found himself looking at a map. “I didn’t even know where Beloit was,” he jokes.

In part to address problems like that, Ms. Hendricks has sent members of her property company, Hendricks Commercial Properties, to Madison to talk to venture capitalists. “Candidly, I wasn’t looking at Beloit,” said Joe Kirgues, a co-founder of Gener8tor, a tech incubator, who one day found himself at a table with Ms. Hendricks’s team.

He said the pitch to him had boiled down to: “Tell us what resources you need.” Today, Gener8tor has an office in Ironworks and is working with several local start-ups.

Mr. Bierman credits Ms. Hendricks for providing a vision of how things can be. Still, he says, “I worry a lot.”

While he does see signs that what Ms. Hendricks has built can be sustainable, “We’ll know a lot more once we get through the next recession,” he said.

For now, around 1,000 people currently work out of Ironworks, according to Mr. Gerbitz of Hendricks Commercial Properties. “Our goal is to get to 5,000, which was what was lost when Beloit Corporation went away,” he said.

Ironworks today is a far cry from its foundry origins. At AccuLynx, the software firm, there is a giant slide running down from the second floor to the first, a video-game console and a giant gold bell that is rung when sales are made.

AccuLynx’s founder, Rich Spanton, described the day his grandfather, who had worked at the foundry as a superintendent for nearly a half-century, visited the building, where he had spent a career assembling steel parts for paper machines. He was astonished at what he saw.

“He walked in,” Mr. Spanton recalls, “and he said, ‘Jeez, we couldn’t have gotten any work done if this had been our office.’”

A benefit to Wisconsin, no thanks to Trump

Matt Tragresser:

This past June, Lt. Gov. Rebecca Kleefisch traveled south of the border to strengthen the economic relationship between Wisconsin and Mexico, a growing interest the Badger State has had for the last 20 years.

The week-long trade mission featured stops in Mexico’s two largest economic hubs of Mexico City and Monterrey, with officials from the Wisconsin Economic Development Corporation (WEDC) joining Kleefisch to promote Wisconsin industries.

With the adoption of the North American Free Trade Agreement (NAFTA) in 1994, trade between Mexico and Wisconsin has grown by 926 percent thanks to low trade barriers including minimal tariffs and overall little government intervention.

In just two decades, Mexico has become Wisconsin’s second largest export market in the world, with exports totaling more than the state’s exports to China, Japan, and Germany combined. This past year alone, trade with Mexico generated $3 billion for Wisconsin and accounted for 15 percent of all exports, an all-time high.

Despite being known as the dairy state, Wisconsin’s top exports to Mexico last year were motor parts and battery waste, followed by centrifuge parts and soybeans.

Increased free trade with Mexico has certainly sparked enormous economic growth for Wisconsin. Apart from the revenue generated from exports, 96,000 jobs in the state have been created or rely heavily on trade with Mexico. Nearly 5,000 of these jobs have been brought to Wisconsin by Mexican companies.

“Mexico is a vital partner to grow businesses and add jobs here in our state. As we’ve recently seen, Wisconsin is a top target for foreign direct investment that can create jobs and factories in our communities,” Lt. Governor Kleefisch told the MacIver Institute.

Free trade between Wisconsin and Mexico has also brought a larger variety of lower-cost products to Wisconsin. Since free trade creates an environment where companies specialize in products that they can cheaply produce in high volumes, goods become less expensive for consumers.

For example, motor vehicles in Wisconsin have become more affordable thanks to trade with Mexico. With a large labor force whose average wage is much lower than other countries, thanks to a very low cost of living, Mexico has become a hot market for vehicle assembly. In Mexico, a worker for a standard car manufacturer will make about $8 an hour, while a worker in the United States can make close to $60 an hour. Mexico’s lower average wage leads to lower prices for Wisconsinites and explains why motor vehicles remain one of Wisconsin’s top imports for 2016.

Importing lower cost products from Mexico has become popular in Wisconsin. Just last year $2.7 billion worth of goods were imported from our southern neighbor. Electric storage batteries, motor vehicles, and tractors were the state’s most popular imports in 2016.

Future trade between the two regions looks promising. Of Wisconsin’s current top 10 export markets, Mexico was only one of two countries that showed positive export growth in 2016. Since 2014, Wisconsin’s increase in sales to Mexico has been larger than its sales to any other country on the entire planet.

Mark Maley, WEDC’s Public Affairs and Communications Director, told the MacIver Institute that Mexico offers many business opportunities for Wisconsin and expects the relationship to continue in the future.

“Wisconsin and Mexico share a mutually beneficial and comprehensive trade and investment relationship. We have hosted three trade trips to Mexico in the last two years to help state businesses find new markets for their products, to encourage Mexican businesses to invest in Wisconsin, and to strengthen industry collaboration between Wisconsin and Mexico in areas such as advanced manufacturing, water technology, and food and beverage production and processing,” he said.

Despite having the pieces and mutual interest to strengthen trade in the future, the partnership could face some troubles within the next year. President Donald Trump aims to renegotiate NAFTA and potentially add a 20% import tariff on all Mexican goods to help fund his proposed border wall. These changes could hinder trade between both regions and ultimately hurt Wisconsinites and Mexicans.

With tensions high at the moment between the United States and Mexico, it is important to recognize the positive impact our southern neighbor has had on Wisconsin’s economy. With billions of dollars generated in sales, more job opportunities, and lower-cost products, free trade with Mexico promises to benefit Wisconsin workers and consumers into the future.

Foxconn and its impacts

As you can imagine, the announcement of Foxconn’s building a southeastern Wisconsin plant and bringing with it 3,000 to 13,000 jobs reverberated throughout Wisconsin.

And beyond. The Chicago Tribune editorialized:

Early this month, when they hit taxpayers with a 32 percent jump in the individual income tax rate, many legislators broke a promise they had made: No more tax hikes without major reforms to help Illinois’ moribund economy. Don’t worry, said Democrats who pushed the tax hike. We’ll get to those reforms soon enough.

But not soon enough, we now see, to keep electronics giant Foxconn from bypassing Illinois to make a jobs-rich investment in southeast Wisconsin. This is a huge win for Scott Walker, the Republican governor of Wisconsin whom Illinois Democrats loathe. Just as this is an embarrassment for Illinois House Speaker Michael Madigan and Senate President John Cullerton.

Once again, the people of Illinois see how Madigan and Cullerton, with their combined 86 years in Springfield, have left Illinois ill-prepared to compete for 21st-century jobs. Their agenda is about raising taxes, not about delivering those reforms. As we wrote a few days ago, every other state on Foxconn’s short list looked better than Illinois by the basic measures of financial stability and pro-growth economies.

No wonder, then, that Illinois is starved for jobs. We expect to learn more in coming days about Foxconn’s thinking. We don’t know details of whatever federal, state and local government incentives lured the company Beyond the Cheddar Curtain. And we can’t be certain how many billions of dollars in investment, and how many thousands of jobs, Wisconsin will gain.

But we do know this: Wisconsin boasts a freshly burnished global image. One of the planet’s largest tech firms, with a million workers worldwide, says its search led it to bet a fraction of its future on Wisconsin. Assuming that happens, expect robust economic growth from suppliers, subcontractors, construction companies and other businesses that will serve Foxconn and its workforce.

Cranky Springfield apologists for Madigan and Cullerton will say we’re overreaching, that Gov. Bruce Rauner is somehow to blame for losing Foxconn to Wisconsin. Except Rauner has been pushing exactly the kinds of employer-friendly reforms that Madigan and Cullerton have resisted, often to please their allies who lead labor unions. …

Enough of their games. Foxconn’s choice of Wisconsin offers a fresh opportunity to act on what’s wrong with Illinois:

We await the reforms legislators promised, so that Illinois doesn’t keep driving employers to other states.

RightWisconsin compares and contrasts:

So here’s the deal. Wisconsin gives Foxconn $3 billion in tax incentives over 15 years, provided they meet their performance targets, and in return Wisconsin gets a manufacturing facility that will have a $7 billion annual impact on Wisconsin’s economy.

The factory will eventually employ 13,000 workers earning on average $53,875 plus benefits. The new Foxconn facility will bring 22,000 “indirect and induced jobs” to the state. In addition, the construction of the new Foxconn facility will mean 10,000 construction jobs as well as 6,000 indirect jobs.

Let’s compare that to “the one that got away.”

Wisconsin Democrats will never forgive Governor Scott Walker for rejecting the proposed high-speed rail between Milwaukee and Madison. That project would have cost the federal government $810 million. That amount did not include local costs for building stations, the cost of former Governor Jim Doyle’s secret train deals with Talgo, and other ongoing costs.

Despite Democratic false claims that the high-speed rail (which was slower than taking a car) would lead to more economic development, that project would have only created 55 permanent jobs.

It’s amazing how many jobs the private sector can create while manufacturing 21st century technology for consumers compared to the government using 19th century technology to create a service that would have to be subsidized by the taxpayers. We’ll take the factory manufacturing LCD screens over Democratic toy trains.

Foxconn will pay, based on a minimum 3,000 and a maximum 13,000 jobs, $161.625 million to $700.375 million in payroll. That is not counting those estimated 22,000 “indirect and induced jobs” from companies that serve Wisconn Valley. Nor does that count those 10,000 direct and 6,000 indirect construction jobs that building LCD World will create. As stated here and elsewhere, those tax incentives cost the state nothing, because nothing stated in this blog would have happened without Foxconn choosing Wisconsin.

 

Foxconn and its Wisconsin Denemies

Wednesday’s White House announcement about Foxconn coming to Wisconsin brought with it predictable complaints from the Wisconsin left, which I have read so you don’t have to. (Warning: Hypocrisies ahead.)

First, Democratic Party of Wisconsin Chair (because no one else wants the job) Martha Laning:

“I welcome new business and jobs to Wisconsin. After six years of seeing job creation promises go unfulfilled and watching major corporations shut down factories or move jobs elsewhere, it’s great to see Democrats like Sen. Tammy Baldwin and Rep. Mark Pocan encouraging new economic activity in the southeastern Wisconsin. 

“Democrats are laser focused on expanding the middle class and giving every Wisconsinite the opportunity to succeed and achieve the American Dream. But in order to have an economy that works for all us – not just the millionaires and billionaires – state-subsidized private sector jobs need to be a good investment that offers a living wage and ensures safe working conditions.

“While we are all thrilled at the prospect of new jobs coming to the state, it is entirely reasonable to be cautious of a scandal-plagued job creation agency handing over taxpayer funds to foreign investors that could potentially leave Wisconsinites with the bill decades into the future.”

Note that the statement includes no examples of what Baldwin and Pocan (whose district doesn’t include “the southeastern Wisconsin”; that would be the House district of Speaker of the House Paul Ryan) have done to encourage new economic activity.

Sen. Chris Larson (D–Milwaukee):

“It is with good reason that Wisconsinites are not yet willing to blindly put their faith, and money, in a feeble jobs promise. We’ve been deceived by Walker’s rose-tinted glasses before.

“Since taking office, Walker has left a trail of broken promises. His pattern of deception has resulted in our hard-earned tax dollars being handed over to campaign donors and companies that outsource, as well as some of the biggest tax breaks going to the richest people in the state, some of whom have used tax loopholes to avoid paying any state income tax for years.

“Our neighbors care about making sure this is a good deal for everyone in Wisconsin. Any move for Foxconn to locate in Wisconsin must also fit with the spirit of our great state. We look to partner with companies that will respect our state’s shared lands and waters. We should reward companies that pay our neighbors a living wage and treat them fairly. If they expect special treatment, they need to have a long-term commitment to our state so we know they won’t abandon Wisconsin as soon as a new enticement goes on the table from somewhere else.

“Wisconsin leaders should not commit to corporate welfare or anything that carves out special exceptions in our laws if it will unfairly hurt local businesses already in our state. Every small-business owner knows: with a billion dollar pinky swear, the devil is always in the details.

“Too many people in our state are struggling in low-wage jobs and living in fear that any day the security of health care could be pulled out from under them. They deserve leaders who will be looking out for their future.

“We demand fairness, and that’s what we’ll be looking for in this deal.”

Based on this Foxconn should feel free to delete any job applicants with Milwaukee home addresses. Larson’s job creation record is nonexistent.

Sen. Jennifer Shilling (D–La Crosse):

“While I welcome new businesses to the state, I want to ensure any state-subsidized private sector jobs offer a living wage and safe working conditions. As we look to expand Wisconsin’s middle class, Democrats will continue to focus on boosting small businesses, strengthening workplace protections and encouraging more locally-grown start-up companies.

“Communities and small businesses that could be at a competitive disadvantage deserve full transparency when it comes to Gov. Walker’s proposed tax breaks for Taiwanese investors. I am cautious of committing taxpayers to decades of economic costs and liabilities.

“The bottom line is this company has a concerning track record of big announcements with little follow through. Given the lack of details, I’m skeptical about this announcement and we will have to see if there is a legislative appetite for a $1 to $3 billion corporate welfare package.”

Numerous media outlets have highlighted a pattern of Foxconn’s misleading job claims and broken promises on economic development. The Washington Post detailed a series of “splashy jobs announcements” from Foxconn that promised thousands of jobs and billions in investments that never quite materialized in Pennsylvania, Indonesia, India, Vietnam and Brazil. With declining wages across Wisconsin and a stagnant economy, Gov. Walker has yet to produce the 250,000 jobs he promised to create by 2015.

Even the Democrats know they’re (accurately) viewed as anti-business when a news release starts with “While I welcome new businesses to the state …”

Assembly Minority Leader Peter Barca (D–Kenosha), as quoted by The Capital Times:

Assembly Minority Leader Peter Barca, D-Kenosha, said he met with Foxxconn representatives bout a week-and-a-half ago, and the company is looking at sites in Kenosha, Racine and Milwaukee counties.

It’s an “exciting opportunity” for southeastern Wisconsin, Barca said, but he wants to make sure the plant provides “long-term, family-supporting job opportunities.”

That must have just killed Barca to use the words “exciting opportunity.” (Barca was in the U.S. Small Business Administration, but as a political appointee, not someone who did important work.) Along with passing on this:

Democrat toadies Zero Wisconsin Now (boldface theirs):

One expert has described Foxconn’s approach to negotiations over public subsidies for their operations saying, “they extract everything they can.”

The company’s track record promising major investments in facilities and gaudy numbers of jobs versus the reality of what they do, or don’t, is well documented in both the U.S. and globally. In addition, serious questions have been raised about the labor practices of a corporation that installed “suicide nets” outside its Chinese operation after over a dozen employees killed themselves or attempted to by leaping from a plant rooftop.

A deal of this magnitude could rank as one of the largest ever public subsidies to lure a private corporation to a state. It demands significant scrutiny and prompt, detailed answers to questions including:

What specific incentives are being proposed for Foxconn, what government entities will be involved in providing them and what are the proposed funding sources? Will legislation be necessary at the federal, state and local levels?

What, if any, new revenue does the state expect to collect from this project in exchange for a multi-billion dollar public subsidy?

What, if any, financial commitments will Foxconn make in exchange for public subsidies? Will they provide funding for worker training, infrastructure upgrades or other community projects?

How many Wisconsin residents will be employed directly, full time by Foxconn at the proposed Wisconsin facility upon its completion versus temporary workers, workers from other states, international employees, and jobs being projected that are actually ancillary to the manufacturing plant operation?

What types of jobs will they be and what will they pay?

What assurances will be provided on labor conditions and benefit? Will the jobs offer comprehensive health care and retirement benefits? Sick time? Vacation? Family and medical leave? Will employees be allowed to unionize should they so choose?

Is this facility being proposed because of a commitment to investing and expanding operation in the U.S. or as part of a strategy to evade potential restrictions or tariffs on foreign based manufacturers of goods imported to the U.S.?

What are the benchmarks Foxconn must meet in order to receive subsidies and what, if any, clawback provisions are in place to recover expenditures of tax dollars if they are not met?

Will access to records associated with the negotiations be denied by Gov. Walker and others?

Are there assurances of environmental or other regulatory exemptions upon which the Wisconsin Foxconn project is based?

Most importantly: Why was this done in 100 percent secrecy?

Zero’s last question is the easiest: Given that we knew this was happening before it was officially announced, it wasn’t done in 100 percent secrecy. These details are negotiated away from public view — whether negotiated by Republicans, Democrats or nonpartisan politicians — because the business demands it. If state or local spending is involved, then the Legislature and county and/or municipal boards will have to approve them, and that won’t be in secret.

About tax credits, Scott Bauer of the Associated Press reports via tweet:

Foxconn tax credits are tied to performance, no credits given if Foxconn fails to invest capital or create jobs

The state would get zero money from Foxconn if Foxconn doesn’t move to Wisconsin. The actual cost of subsidies is zero, because they only exist because of Foxconn’s moving to the state. (Unless you believe, like Democrats do, that every cent of everyone’s and everything’s money belongs to government.)

The other questions … well, I’ve already asked the pertinent questions well before those trying to deflate partisan disadvantage. I have more objectivity about people I vote for than Democrats seem to have.

This GIF posted by a Facebook Friend sums up what Wisconsin Democrats really think:

Milwaukee County Executive Chris Abele, neither a conservative nor z Republican, takes credit:

“Today’s announcement that a major global employer, and one of the largest manufacturers in the world, will be setting up massive operations in southeastern Wisconsin is a great example of what can happen when we all work together. It’s also a testament to the strength and appeal of our workforce and the commitment from many levels of government to devote the resources needed to invest in the kind of infrastructure that will attract and retain global talent.
“The Milwaukee area has been experiencing an unprecedented economic development boom, spurred largely by projects in the Park East, at the Couture, and on the County Grounds. This deal takes that development to another level and I believe represents the greatest opportunity in a generation to empower our job market, sustainably raise wages for our workforce, begin to address the racial disparities that exist in economic opportunity, housing, transportation, and employment, and show the rest of the world how effective and innovative our Wisconsin workforce can be.
“I’m excited to make sure our neighbors to the south in Racine and Kenosha counties will join Milwaukee County in driving the state’s economy forward and upward. A regional, and comprehensive, approach to workforce development is exactly what it will take to ensure that Foxconn has the skilled workforce and transportation infrastructure they need to thrive in Wisconsin for years to come.
“I congratulate the many partners representing diverse business, education, and labor interests who worked so hard to make this development a reality of which everyone can be proud.”

Labor interests? Education interests? Whatever.

As for the varied criticisms of the Walker approach to economic development, the Department of Workforce Development released this Wednesday afternoon:

The Department of Workforce Development (DWD) today released the U.S Bureau of Labor Statistics (BLS) estimates of unemployment and employment statistics for metro areas, major cities, and counties in Wisconsin.  The estimates include updates for May 2017 and the preliminary estimates for June 2017. These numbers are not seasonally adjusted. In brief, the estimates showed: 

  • Metropolitan Statistical Areas: Preliminary June 2017 unemployment rates decreased in all areas when compared over the year to June 2016. The largest 12-month decline was 1.3 percent in Racine. The rates ranged from 2.7 percent in Madison to 4.2 percent in Racine. 
  • Municipalities: Preliminary June 2017 rates decreased in the state’s 32 largest municipalities when compared over the year to June 2016. The latest rates ranged from 2.7 percent in Fitchburg, Madison, and Sun Prairie to 5.2 percent in Beloit. 
  • Counties: Preliminary June 2017 rates decreased in all 72 counties when compared over the year to June 2016 rates. The largest over the year decline was 2.4 percent in Menominee county. The latest rates ranged from 2.6 percent in Dane and Lafayette to 6.5 percent in Menominee.

The release of the June 2017 local rates follows last week’s release of BLS monthly estimates showing a preliminary seasonally adjusted unemployment rate of 3.1 percent in June 2017, maintaining its lowest rate since October 1999. Data also showed both total labor force and employment in Wisconsin remained at all-time highs in June.

Other indicators of the state of Wisconsin’s economy include:

  • Wisconsin’s labor force participation rate of 68.9 percent continues to outpace the national rate of 62.8 percent.
  • Wisconsin’s total labor force and employment remain at all-time highs.
  • Wisconsin’s seasonally adjusted employment change of 76,500 year over year is the largest since July 1995.
  • Wisconsin’s 3.1 percent unemployment rate for June maintains the lowest rate since October 1999.

I have indicated skepticism in the past with government-generated unemployment figures. The unemployment rate in this state is certainly higher than these numbers would have you believe. However, so is every other state’s and the nation’s unemployment numbers, so as measured by how the feds measure everyone, Wisconsin’s unemployment rate is still lower than most states and the nation as a whole, and that has been the case for the entire Walker administration.

A Walker news release said Foxconn’s $10 billion investment will create, it claims, 13,000 jobs, not counting jobs created by companies supplying Foxconn in LCD Valley, with, according to The Capital Times, $348 million in state and local tax revenues.

It is unfortunate that states and communities must give various incentives to get businesses to locate there. That is the fault of government that is too large, does too much and taxes too much. It’s also true that 100 employers of 100 employees each is preferable to one 10,000-job employer, because when that employer gets a cold, everyone there will get chills. But in our imperfect world, having that employer is better than not having that employer. Democrats know how to grow government, not the economy and not businesses.

The average household income in this state is $66,432, and the median household income is $52,893. The stated average wage of Foxconn jobs will equal the median household income of this state. (Democratic complaints about income inequality in 5 … 4 … 3 …) Those jobs are reportedly costing $100,000 in tax incentives, which would be made up in two years. (“Tax incentives” are another way of saying “cutting taxes you should not have to pay anyway.”) Democrats bitch, as you’ve already read, about insufficient jobs and pay and all that, and then bitch when an employer of vast size comes to the state, since they had nothing to do with that happening. If a Democrat was governor, you would not have read a single word you previously read from Laning, Larson, Shilling or Scot Zero. If only they were unemployed.

 

The media vs. the market

James Freeman:

Skepticism toward the media is most often associated with conservatives in Middle America, some of whom eat something other than artisanal sandwiches. But this week brings more evidence that investors worldwide have become very reluctant to buy what many established news organizations are selling. How else to explain the collective shrug of the shoulders in financial markets to the latest breathless media reports about alleged collusion between the 2016 Trump campaign and Russia?

Such reports have dominated this week’s news as much of the professional commentariat has pondered out loud whether treason has been committed in the President’s inner circle. Yet after an ever-so-slight hiccup on Tuesday following Donald Trump Jr.’s release of emails regarding a meeting he took last June with a Russian lawyer, stocks drifted higher. Since then, investors have spent much of their time parsing the remarks of Federal Reserve Chair Janet Yellen.Reassured by her questionable suggestion that interest rates won’t have to rise very fast or very far in the years ahead, they continue to keep market indexes near record levels.

Investors in the aggregate obviously don’t believe that the republic is coming to an end, nor do they seem to expect a wrenching change in U.S. leadership. There have been similar episodes over the last several months of sharp divergence between the collective analytical judgment of journalists and that of investors. This era of reported turmoil has been marked by a striking lack of volatility in the financial markets. Stocks aren’t cheap by historical standards and corrections do happen.

Yet the world’s investors still like U.S. equities, despite constant media reports that U.S. constitutional governance is hanging in the balance. Now let’s look at the general population in the U.S. A new report from the Pew Research Center also suggests that the news media’s credibility problem reaches well beyond the hard-core MAGA crowd. A full 85% of Republicans and those who lean Republican have a negative view of the national news media. And even among Democrats and those who lean Democratic, the press corps is underwater, with 46% holding a negative view compared to 44% holding a positive one.

Each respondent may distrust the media for a different reason. And perhaps investors are not so much ignoring the reported news as they are trying to strike a balance between conflicting reports. For example, let’s say that an investor has concluded that the New York Times and the Washington Times are equally trustworthy. A reader of this story from the New York paper is bound to take away a very pessimistic view of the current White House:

As Air Force One jetted back from Europe on Saturday, a small cadre of Mr. Trump’s advisers huddled in a cabin helping to craft a statement for the president’s eldest son, Donald Trump Jr., to give to The New York Times explaining why he met last summer with a lawyer connected to the Russian government. Participants on the plane and back in the United States debated how transparent to be in the statement, according to people familiar with the discussions.

Ultimately, the people said, the president signed off on a statement from Donald Trump Jr. for The Times that was so incomplete that it required day after day of follow-up statements, each more revealing than the last. It culminated on Tuesday with a release of emails making clear that Mr. Trump’s son believed the Russian lawyer was seeking to meet with him to provide incriminating information about Hillary Clinton as “part of Russia and its government’s support for Mr. Trump.”

The Russia story has become the brier patch from which the president seemingly cannot escape.

But an investor reading this Washington Times story published the same day may conclude that the real danger to the republic was narrowly avoided last November:

While the mainstream news media hunts for evidence of Trump-Russia collusion, the public record shows that Democrats have willfully used Moscow disinformation to influence the presidential election against Donald Trump and attack his administration.

The disinformation came in the form of a Russian-fed dossier written by former British intelligence agent Christopher Steele. It contains a series of unverified criminal charges against Mr. Trump’s campaign aides, such as coordinating Moscow’s hacking of Democratic Party computers.

Some Democrats have widely circulated the discredited information. Mr. Steele was paid by the Democrat-funded opposition research firm Fusion GPS with money from a Hillary Clinton backer. Fusion GPS distributed the dossier among Democrats and journalists. The information fell into the hands of the FBI, which used it in part to investigate Mr. Trump’s campaign aides.

Mr. Steele makes clear that his unproven charges came almost exclusively from sources linked to the Kremlin and Russian President Vladimir Putin. He identified his sources as “a senior Russian Foreign Ministry figure,” a former “top level Russian intelligence officer active inside the Kremlin,” a “senior Kremlin official” and a “senior Russian government official.”

While investors may be unnerved to learn how many political operators of both parties seem eager to glean opposition research from Russian sources, they apparently still don’t see it as a threat to American prosperity, or the rule of law on which it depends.

100 fewer employees later …

The biggest news in sports media this week was Wednesday’s layoffs of 100 ESPN employees.

As someone who was told not to go to work the next day or any future day by an employer (which event started this blog six years ago), I have sympathy for those laid off. It seems highly unlikely that ESPN’s business problems are the fault of, for instance, Ed Werder, ESPN’s 17-year NFL reporter, or Jayson Stark, ESPN’s 17-year baseball reporter. Evidence that life is unfair is that the worker bees get laid off instead of those on the executive floor whose bad decisions caused bad financial results that led to the need for those layoffs.

ESPN’s problems are driven by economics, in two directions. Former ESPN, well, whatever he was Colin Cowherd opined, and Awful Announcing heard him say …

Speaking on 92.3 The Fan in Cleveland, Cowherd said he knew things were going to change at ESPN when he learned of the news that the network had signed a huge megadeal to keep the NBA:

“I told my producers … ‘fellas, it’ll never be the same here.’ You can not pay four times for the house what you paid for the house last year. And I said this company will never be the same.

“It was at that point I started looking, and this is not going to end today. They have really cost-prohibitive contracts, combined with cord-cutting.

“I said this when they cut 850 people, I said it the next day, it’s awful, and it will happen annually for the next decade. You have to have contracts …”

And regarding the layoffs, Cowherd noted that the overpayment for the NBA and in particular, the NFL has come back to bite ESPN and it’s forced the company into layoffs:

These firings are awful. It makes me sick.

“The good news is – most of the people let go are really talented, but this is all about business, and when you have overpaid for products, sometimes six and seven hundred million more than you had to pay, certainly with the NBA that’s the case, they just pay way too much for it. This is the result, it’s awful, and I think unfortunately this was the first of a 10-year deal with the NBA and I just feel awful – there’s are a lot of good people.”

But he added that he feels that ESPN has let go of the most expensive people at the company and that “a lot of them are going to land in really good places.”

The other half is that ESPN charges cable operators more than $7 per subscriber per month, and of course those charges are passed on to cable customers. Cable companies’ failure to get viewers the channels they want and not pay for the channels they don’t want has prompted cancellation of cable TV. ESPN has lost about 10 million subscribers over the past three years.

ESPN has a website, and has an app. But if you’re not a cable subscriber, you can’t see live games on either, including WatchESPN. (You also can’t see live games even if you are a cable subscriber if your cable company doesn’t offer WatchESPN.)

Even if you’re a sports fan there are a lot of ESPN “sports” not worth watching, including so-called “extreme” sports, Mixed Martial Arts (imagine boxing with no rules) and poker, and has replaced them with far too many debate shows. Part of it is that ESPN has lost a few properties, including the baseball postseason, the National Hockey League, and NASCAR auto racing, and according to viewers (of which I am not), its news coverage of sports it doesn’t cover has dropped precipitously.

What viewers may find somewhat ridiculous is who is still at ESPN — namely, Chris Berman, whose best days are well past him, and Stephen A. Smith. The latter got rather defensive about his job status, as reported by Alex Putterman:

In the midst of ESPN’s massive round of layoffs Wednesday, more than a few people brought up Stephen A. Smith as evidence of how the Worldwide Leader had gone astray. How, people wondered, could ESPN fire so many great reporters while keeping a loudmouth hot-take artist like Stephen A. Smith around to appear on First Take and numerous other shows?

Among the legions making some version of that argument was former Sports Illustrated writer and best-selling author Jeff Pearlman, who called Smith’s employment in the face of layoffs “an assault on the profession.” …

Well Stephen A. Smith puts up with a lot of crap, but he apparently wasn’t willing to put up with that. On his radio show Thursday, he addressed Pearlman’s criticism, as well as the general perception that he is unqualified for such a lofty position at ESPN.

Smith began the segment by saying he didn’t like to respond to criticism but that he felt compelled to in this case. He then described the layoffs as business-related and implied that he was protected because his show is popular and well-rated. Then he really got going:

I’m going to ask Mr. Jeff Pearlman and all the Jeff Pearlmans of the world a simple question: Why are you focusing on me? There are people in our business who actually get paid more, who do less and produce less. Why are you not talking about them?

Like when they call me ‘Screamin’ A?’ I’m the only dude on the air who’s loud? I know plenty of white dudes who are screaming and going off. They’re called passionate. I’m called loud. … The real issue at hand is, what you’re bringing into question are my qualifications.

Smith then listed out his career history, from graduating from Winston-Salem State University to holding numerous internships to working at several newspapers, including the Philadelphia Inquirer, where he was promoted again and again until he became on of the only black sports columnists in the country.

His point was simple: He worked hard to earn the position he’s currently in.

Some people will surely balk at Smith’s invocation of race, but he wasn’t really calling Pearlman racist or suggesting all criticism of him is due to his skin color (though undoubtedly some fraction of it is). This was his main idea:

I used to be a journalist? Mr. Pearlman, you used to be a college student. You used to be a high-school student. Last time I checked, there’s a level of elevation that took place because you graduate to certain levels. I’m not a blogger. I came up in this industry where you had to be a journalist. You had to break stories. You had to break news in order to elevate your career to get to a certain point to get to a certain level before you even had the license to give your opinion, especially if you were a black man. 

Mr. Pearlman’s not black, maybe that’s why he doesn’t understand where I’m coming from. Maybe that’s why he’s so quick to talk about what I have deserved. I gave ya’ll my resume. I transferred from newspaper to television, from television to television and radio. I’ve done this. My credentials speak for themselves. I’m so sick and tired of people coming at me. If you want to talk credentials, name the time and place. Tell me what level I didn’t work on.

Smith repeatedly complimented Pearlman, saying he would never dare question another writer’s credentials.

Stephen A. is absolutely 100 percent correct that he has the resume for the position he’s in, that he worked his way up the ladder and earned bigger and bigger roles, and that it’s not easy to get to where he is now. Without question, his critics lose sight of that all the time, unfairly depicting him as a brainless carnival barker.

However, it’s certainly fair to wonder why Smith uses his hard-earned position to propagate a high-pitched, disagreement-centered, occasionally offensive model of television that risks undermining the more journalistic aspects of the industry—and to question why that’s the model ESPN chooses to reward.

The 800-pound gorilla in the room, however, is ESPN’s conscious decision to insert politics into its sports coverage. Those who approve of this have sworn up and down all week that that has nothing to do with ESPN’s current financial problems. Certainly it’s not the primary cause, but if cable subscribers are dropping you, and some number of your viewers are not fans of the liberal politics you’re espousing, one would logically seem connected to the other.

ESPN quotes a fellow La Follette Lancer (we were in the same journalism class) on its editorial policy:

ESPN has issued new political and election guidelines for its employees that, while allowing for political discussion on the network’s platforms, recommend connecting those comments to sports whenever possible. The new policies also provide separate guidelines for ESPN staffers working on news and those engaging in commentary. …

“Given the intense interest in the most recent presidential election and the fact subsequent political and social discussions often intersected with the sports world, we found it to be an appropriate time to review our guidelines,” said Patrick Stiegman, ESPN’s vice president of global digital content and the chairman of the company’s internal Editorial Board, which drafted the new guidelines.

Stiegman said no single issue or incident led to the change, but Craig Bengtson, ESPN’s vice president and managing editor of newsgathering and reporting, said the nation’s tense political climate did play a role.

“We have the convergence of a politically charged environment and all these new technologies coming together at once,” he said. “Based on that, we wanted the policy to reflect the reality of the world today. There are people talking about politics in ways we have not seen before, and we’re not immune from that.”

Stiegman said the new election guidelines are no longer just targeted at presidential elections. “We simply extended our approach to covering presidential elections every four years to major elections, in general, believing all the same principles should apply,” Stiegman said.

So what’s different in the new policies? Let’s start with the Political and Social Issues guidelines. Its first line lays out ESPN’s challenge quite accurately:

“At ESPN, our reputation and credibility with viewers, readers and listeners are paramount. Related to political and social issues, our audiences should be confident our original reporting of news is not influenced by political pressures or personal agendas.”

As I wrote in November, not all ESPN consumers — or employees, for that matter — feel the company has lived up to this ideal. Stiegman said that the buzz around the topic of ESPN and politics — also written about by The New York Times, Awful Announcing, the Orlando Sentinel and many conservative sites criticizing ESPN’s perceived leftward tilt — didn’t play a significant role in the revision of the guidelines.

The two most notable changes from the Political Advocacy policy are the delineation of guidelines between news and commentary, and allowing for increased political discussion on ESPN platforms, as warranted and connected to sports. This isn’t a surprising development, it’s just new.

“We wanted to err on the side of transparency and trust with our reporting,” Stiegman said, “but also give our columnists and commentators the freedom to discuss topics relevant to those sports fans who visit our platforms, even if the issues are political or social in nature.”

Here are other notable points in the Political and Social Issues policy, with my thoughts:

“Original news reports should not include statements of support, opposition or partisanship related to any social issue, political position, candidate or office holder.”

This one seems straightforward and achievable, at least within ESPN’s platforms. The one place on ESPN in which you don’t see straight opinion is on the hard news side of the operation.

“Writers, reporters, producers and editors directly involved in ‘hard’ news reporting, investigative or enterprise assignments and related coverage should refrain in any public-facing forum from taking positions on political or social issues, candidates or office holders.”

The three key words here are “public-facing forum.” That expands this policy beyond ESPN’s borders and brings the Wild West of social media into play. In fact, later in the memo, it is said directly that the policy applies to “ESPN, Twitter, Facebook and other media.”

This is where the potential for problems exists. ESPN news reporters tweeting political opinions from their own social accounts would technically violate this policy. Again, hard news reporters are less likely to use social media for this purpose than commentators, but how effective this policy is will depend on how hard executives choose to look at social media. Let’s be honest: It’s not too hard to find ESPN employees tweeting political opinions. Yes, much of that activity does fall within the new guidelines, which also note that those who do publicly express political views could be reassigned when covering stories. But the propriety of other posts is a tad murkier.

“Outside of ‘hard’ news reporting, commentary related to political or social issues, candidates or office holders is appropriate on ESPN platforms consistent with these guidelines.”

This is meaningful because, unlike the company’s previous policy, it states that commentary on political and social issues is OK. The previous policy not only didn’t say that but also conveyed a tone that suggested that dipping into political waters carried more danger than reward. Put another way, the new policy has gone from “It’s dangerous out there, so probably best to stay home” to “It’s dangerous out there, so here are some tools to best keep you safe.” …

“The presentation should be thoughtful and respectful. We should offer balance or recognize opposing views, as warranted. We should avoid personal attacks and inflammatory rhetoric.”

What is a “personal attack” and what’s considered “inflammatory”? As with many journalistic policy questions, those are subjective. And in policies like these, that can lead to caution.

“There is always a layer of subjectivity in such areas,” Stiegman said. “Editors and producers will work with those offering opinions on these topics to ensure the dialogue and debate is thoughtful, respectful and as fair as possible.”

That is not happening, according to Ben Shapiro back in November:

From giving Caitlyn Jenner a heroism award to stumping for Black Lives Matter, from pushing gun control to praising Kaepernick’s heroism, from firing Curt Schilling for expressing anti-radical Islam sentiments to threatening Chris Broussard for taking a religious view of homosexuality while doing nothing about Kevin Blackistone for calling the national anthem a “war anthem,” ESPN has become – as I’ve long said – MSNBC with footballs.

Now, ESPN’s public editor is admitting that the network has a problem. As Newsbusters reports, Jim Brady admitted, “One notion that virtually everyone I spoke to at ESPN dismisses is what some have perceived as unequal treatment of conservatives who make controversial statements vs. liberals who do the same.” He added:

ESPN is far from immune from the political fever that has afflicted so much of the country over the past year. Internally, there’s a feeling among many staffers — both liberal and conservative — that the company’s perceived move leftward has had a stifling effect on discourse inside the company and has affected its public-facing product. Consumers have sensed that same leftward movement, alienating some…. For most of its history, ESPN was viewed relatively apolitically. Its core focus was — and remains today, of course — sports. Although the nature of sports meant an occasional detour into politics and culture was inevitable, there wasn’t much chatter about an overall perceived political bias. If there was any tension internally, it didn’t manifest itself publicly.

Brady talked to anchor Bob Ley, who admitted that ESPN has no “diversity of thought.” A conservative employee told Brady that “If you’re a Republican or conservative, you feel the need to talk in whispers.” Jemele Hill, naturally, said “I would challenge those people who say they feel suppressed. Do you fear backlash, or do you fear right and wrong?”

This is the problem. And this is why ESPN and the media more generally fail. It is suppression to label those who disagree with you politically morally evil because they disagree. Yet that’s what Hill does. That’s what ESPN does, too. The left believes its opinions and feelings are facts; those who disagree are therefore either morons or fascists. That’s why Hill thinks Schilling should have been fired for putting up a meme expressing that transgender people should go to the bathroom in the restroom that matches their biological sex. Schilling must be evil.

That perspective comes across in ESPN’s casual leftism. And it alienates viewers. I’m one of them. I used to watch ESPN every time I worked out. Now I’d rather have the television off. I’m not interested in hearing talking heads who know less about politics than they do about water polo take for granted that they are morally righteous, and everyone on the right is morally obtuse. Screw them. I’d rather cut the cord entirely.

Sean Davis says:

The industry insider I spoke to said the focus on politics was a symptom, rather than a root cause, of all these current issues. According to this insider, ESPN executives saw the writing on the wall — higher costs, subscriber losses, lower ratings — and decided that it needed a bigger content pie to attract more content consumers. Sports is too small, so why not try for a real mass audience by broadening the network’s focus to include news and politics? If X number of people like sports, and Y number of people like politics, then surely combining sports and politics will lead to a much bigger audience, thereby solving the company’s financial dilemma.

This view, of course, ignores how people consume political news. The diehards who love political news don’t turn on the TV or open the laptop and navigate to sites with zero bias that just play it straight. Why? Because those kinds of political news and commentary providers don’t exist. Because that’s not what political junkies want. Liberals want news from liberals, and conservatives want news from conservatives. The Balkanization of political news and commentary didn’t happen by accident. People in this business know you have to pick a side. That works in political news. It doesn’t work if you have a bipartisan mass media audience.

Instead of expanding its pie by combining two types of mass media content, ESPN ended up communicating to half its audience that it didn’t respect them. How? By committing itself entirely not to political news, but to unceasing left-wing political commentary.

You want to watch the Lakers game? Okay, but first you’re going to hear about Caitlyn Jenner. Want some NFL highlights? We’ll get to those eventually, but coming up next will be a discussion about how North Carolina is run by racist, homophobic bigots. You want to see the box scores of today’s baseball games? You can watch those at the bottom of the hour, but right now some D-list network talent would like to lecture you about gun control. After that we’ll have a panel discussion about how much courage it takes to turn your back on the American flag.

The most interesting aspect of the mass layoffs on Wednesday isn’t that they happened, it’s who the network targeted. Not the high-priced carnival barkers and the know-nothing loudmouths doing their best to make Rachel Maddow proud. Nope. ESPN targeted sports reporters. In an effort to cut some fat from its bottom line, ESPN exchanged a scalpel for a chainsaw, skipped the fat entirely, and went straight to cutting out muscle.

If ESPN wants to once again be the worldwide leader in sports, it should refocus on covering sports, which used to be a refuge from politics and the news. America is politicized enough already, and if its citizens want political news, several cable outlets do political news far better than ESPN ever could. Instead of doing sports and politics poorly, perhaps the network could return to the thing that it used to do better than everyone else in the world: cover live sports.

Unlike those with nothing more than opinions, Deep Root Analysis looks at data:

The FOX blog “Outkick the Coverage” has attributed ESPN’s decline to the rising partisanship coming out of Bristol, labeling the network “MSESPN” in pieces like this one, headlined “ESPN Profit Plummets As Network Turns Left”. “Outkick the Coverage’s” Clay Travis supports his argument with Scarborough data showing most sports fans are conservative politically. With the news of today’s layoffs, Travis argues that the network’s leftward turn is “more a symptom of the collapse than it is a cause of the collapse.”

Naturally, the news out of Bristol has led to a variety of “takes” across the Internet. The National Review Online wrote a warning about politicizing sports. Others have scoffed at the idea that partisanship has kept people from watching ESPN, even as ESPN’s public editor concedes that it is among “a set of smaller causes” harming ESPN. Perhaps the hottest take of the day claimed that “sports fans really don’t like anyone who stands up for civil rights.”

WHAT DOES THE DATA SAY?

But is there data to support the notion that Republicans are turning off ESPN as the network ramped up its political commentary during the 2016 election and beyond?

Deep Root Analytics specializes in local television measurement by segmenting the population into political, advocacy and commercial groups and matching those segments into observed TV viewership data via set-top boxes and smart TV data. This allows Deep Root to produce customized ratings and indices for every program and daypart on broadcast and cable TV – including data on ESPN’s viewership among loyal Democrats and Republicans.

We analyzed viewership data in a large media market in a swing state (Cincinnati, OH) for the entirety of 2015 and 2016.  Also, to control for any changes in partisan identification between 2015 and 2016, Deep Root Analytics analyzed viewership among the same audiences across both years.

In our analysis, a clear trend emerges: ESPN’s viewership in this key swing state market became less Republican during 2016.

Specifically, in 2015, the ESPN audience on average skewed Republican across all dayparts, ranging from 12% more Republican (Early News, Late Fringe, Overnight) to 21% more Republican than Democratic (Early Morning).

In 2016, every daypart on ESPN became less conservative, with Daytime being only 2% more Republican than Democratic, while Late Fringe and Overnight programming became 10% and 12% more Democratic than Republican – a 22 and 28 point shift, respectively.

The same is true across other ESPN properties. ESPN2 skewed Republican across most dayparts in 2015; in 2016 all dayparts skewed Democratic. Every daypart also switched on ESPN News from 2015 to 2016.

ESPNU was the only network that retained its mostly Republican audience. ESPN Deportes – the network’s Spanish language channel – became even more Democratic in 2016 than it already was in 2015.

Here is a complete look at the 2015-2016 shift in partisanship across ESPN networks:

To be sure, the ESPN layoffs signal a larger business challenge facing the network. But at least in Cincinnati, the partisanship of viewers noticeably shifted – just as ESPN’s problems got worse.

I would contend that there are more conservative fans of sports than liberal fans of sports. Conservatives did not create the odious phrase “the personal is political.” Conservatives did not create today’s culture of participation medals. Unlike most of life, sports is closer to black and white — team A defeats team B; athlete C finishes first, which means the rest do not.

Here is an example of ESPN’s self-defense, from its Undefeated site:

In sports, everything from choosing fantasy sports teams to selecting the teams that will play for big-time college football national championships is rooted in statistics and statistical analysis, wins and losses and strength of schedules. Further, in sports, everything from a player making an obscene gesture to a pro franchise abandoning one city for another can prompt earnest discussions about right and wrong, revenge, rehabilitation and forgiveness.

But in the nation’s public policy, we too often allow ideology and political maneuvering to render facts moot, especially when those facts support inconvenient truths such as global climate change. And morality, if it is acknowledged at all, is presumed to be the province of specific parties or ideologies, instead of governing our thinking, decisions and actions. From public education to health care, we focus more on the politics of changing public policy than the efficacy and morality of making the changes.

Consequently, our nation, a house divided, struggles to stand: We’re a people who talk to one another without a common political vocabulary, a people who seek to silence dissenting voices. We’re a people who seek to move without common direction, a people who would solve our problems without a consensus of what those problems are, or a common moral purpose to guide our actions.

The apologia for this comes from the oxymoronic Think Progress:

I truly wish this went without saying, but apparently it doesn’t: Reports of ESPN’s political agenda have been greatly exaggerated, and politics are absolutely not to blame for the cuts this week.

ESPN is not a political network. Its analysts do not spend hours debating the latest poll numbers, reporting on proposed legislation, or counting down to lawmakers’ town halls in their home districts.

ESPN covers sports. It just doesn’t pretend that those sports happen in a vacuum.

That means ESPN will cover stories like Colin Kaepernick’s protest during the national anthem, a team of WNBA players wearing “Black Lives Matter” t-shirts during warm-ups, and the domestic violence allegations against an potential NFL draftee.

Sports are an escape, yes, but they are also enriched and impacted by the real-life events happening around them. Covering these topics accurately and fairly when they directly intersect with the sports world isn’t politics, it’s journalism.

“The word ‘politics’ has become too all-encompassing,” SportsCenter host Jemele Hill said on the Sports Illustrated Media Podcast with Richard Deitsch in February. “Mike and I aren’t … breaking down the Affordable Care Act. That’s politics. Understanding somebody’s right to speak out against injustice, oppression, and police brutality, isn’t a political matter. It’s right or wrong.”

“‘Don’t hit women’ is not politics,” her co-host Michael Smith added.

“Sorry we don’t tolerate bigotry here. Why are you taking offense to us suggesting that African Americans — breaking news — have been treated differently and unfairly for the entirety of this country? That’s not a hot take.”

Of course, what Hill and Smith are touching on here is that when people complain about anything getting “too political,” it’s a safe bet the criticism is actually that it’s too liberal. And that usually implies it’s too diverse or too outspoken about inequality.

The president of the company has pushed back against this idea, too.

“The Walt Disney Company and ESPN are committed to diversity and inclusion,” ESPN President John Skipper said last year in response to similar accusations that the company had gotten too liberal. “We do not view this as a political stance but as a human stance. We do not think tolerance is the domain of a particular political philosophy.”

Interestingly, not everyone at ESPN seems to be on board. The New York Post reports:

ESPN’s sweeping staff cuts are not just the result of ambitious TV rights deals and an overburdened budget, popular “SportsCenter” anchor Linda Cohn suggested Thursday.

The network may be losing subscriber revenue not just because of cord-cutting, Cohn allowed, but because viewers are increasingly turned off by ESPN inserting politics into its sports coverage.

“That is definitely a percentage of it,” Cohn said Thursday on 77 WABC’s “Bernie and Sid” show when asked whether certain social or political stances contributed to the stupor that resulted in roughly 100 employees getting the ax this week. “I don’t know how big a percentage, but if anyone wants to ignore that fact, they’re blind.”

Cohn agreed with the argument that certain sports fans may have disapproved of the way ESPN covered polarizing figures such as Roger Goodell, Colin Kaepernick and Caitlyn Jenner.

The example used was of the 2015 ESPYs. Jenner, a former Olympic champion in the decathlon, won the prestigious Arthur Ashe Award for Courage for publicly coming out as a transgender woman. Some felt athletes suffering from disease or disability — such as college basketball player Lauren Hill, who died from cancer three months before the ceremony, and marathoner Noah Galloway, who lost an arm and a leg in the Iraq War — were more deserving.

Cohn, a 25-year ESPN veteran, toed the company line.

“You know, when you work for a big company, you have to follow in line, you have to pay the bills,” she said. “But you just kind of look in the mirror and do what you think is right no matter what else is going on around you. And that’s what I always tried to do.”

ESPN and its liberal sycophants are taking the usual liberal tack that any position other than their own is wrong and not worthy of consideration. As usual, the left approves of every kind of diversity except for political diversity.

Whether you agree with ESPN’s politics, or whatever causes you’d like to attribute to ESPN’s decline, ask yourself this question: If ESPN is losing viewers (and it is), why should ESPN go out of its way to alienate its (remaining) viewers?