Mining For the Truth

UPDATE! March 18th WMC Meeting
 with Chinese Consul General Zhao Weiping in Madison
"The Capitalists will sell us the ropes to hang them with!"
Comrade Lenin

Updated 3/31/2013 (see photo and caption link)

When the Republicans came out with the new/old mining bill the reaction of Senator Bob Jauch in who's district the Penokee range lies called it a "hoax".  Much was being made over environmental issues, conflicts with tribal rights and Federal regulations but as time moves on a story has been developing that was not entirely made clear in the weeks leading up to the vote.

The first hint we got was a series of rumors that Gogebic Taconite (GTAC) - has no real intention of ever putting a shovel in the ground up there.  That's kind of a stunning claim given all the talk about investment and  high paying jobs.  The assumption many were working off of (including myself) was that it was merely a political stalking horse intended to distract from this Governor's stunningly bad jobs record.  By pumping the sunshine of thousands of jobs that would at best amount to perhaps 1% of the promised 250,000 jobs that have yet to materialize from Walker's worker's paradise it was possible for Republicans to posture themselves into the image job creation warriors.  Political straw men have their value.

Think about it.  In the last election Republicans pounded hard at the bad economy blaming Dems like Jessica King for worker's desperation.  Never mind the mine would have (and still will) take years to even begin.  Imagine the political gold that a passed State bill would yield that was then shot down by the Federal Government (EPA or Army Corp of Engineers) or worse yet - the tribes!  Heaven forbid a white man's fortune should be forbidden by a red one.  The political red meat would feed conservatives interests for a decades or more.  No mine.  No environmental damage.  But real profits none the less.

But, since the bill's passage a different motive has evolved and its a good deal more troubling.  It could well result in real digging and by forces that may well be out of reach of any sort of accountability even at the State level.  The first hint we got of this was from Esquire's politics blog about Walker's seeming winning streak.  It points out some interesting things about the mine...

Last year Walker travelled to Dallas to meet a contingent of Chinese investors, and he is scheduled to travel to China on a trade mission next month.  [...]

Quoting someone named Hansen (Dave?) it states, "China is the world's largest producer of iron ore and as one of the world's largest markets they have the ability to affect supply and prices. China has also recently begun expanding its mining operations outside of its borders, including opening the massive Sino Iron project at Cape Preston, in Western Australia's Pilbara region." 

Read more: Scott Walker Wisconsin Lawsuit Dropped - Wisconsin Gets What It Voted For (Twice) - Esquire http://www.esquire.com/blogs/politics/scott-walker-wisconsin-lawsuit-dropped-030613#ixzz2N406qq8S

 A single blog does not a conspiracy make.  But there's more!  This showed up on the Minnesota public interest blog minnpost.com ...

Whether it's iron, grain or now airplanes, it's interesting to see how China, India and other emerging nations are shaping the future of northern Minnesota's economy.

India's Essar Steel is a large potential player in Iron Range mining. Chinese steel production and demand is now a central indicator in the global steel industry. One little hiccup and Hibbing Taconite, MinnTac or the others go on temporary shutdown. Or they hire 100 people tomorrow.

See minnpost.com article here

Finally a letter to the editor in the Rhinelander Star Journal points out some important information missing from the discussion to this point.  It seems that the land and mineral rights were previously owned by the biggest iron interest in the country, U.S. Steel which in 2003 had agreed to sell it to the Nature Conservancy which through the Forest Legacy Fund which would have committed the entire area to a logging and recreation in perpetuity.  Only the deal fell through for reasons no one has fully explained which eventually lead to the land falling into the hands of GTAC - a company which is a sub of another company which itself has never mined anything and the parent has never mined iron ore.

The letter asks...

In 2003, one of the largest steel-producing companies in the world was willing to sell a conservation easement for its 16,000 acres on the Penokee Range, knowing that mining would be prohibitive. Yet in 2013, our legislators insist there is profit and jobs to be had in those same hills. Facts suggest otherwise. We have been duped. To what end?

See full article here:

 To what end indeed?  What are we dealing with here?  We know that the quality of the ore in that deposit is low grade.  It is hard to get as because it runs deep,  And, it is close to the largest single body of water in North America and a good deal below its surface.  The amount of water that will have to be pumped daily to keep the pit dry is staggering.  To make a long story short - its expensive iron.

It makes sense that the Chinese could be involved.  They are the kings of cheap.  With no mores for their own environment much less ours its possible to imagine any sort of anti labor practices that would significantly water down the glowing images of prosperity in the north.  One might even wonder if the jobs themselves (certainly top jobs) might end up going to Chinese workers and not Americans. The bill already lays off millions in development costs on local towns that should be picked up by the company.  With the state already teetering on the edge of Right To Work pushed by Walker's owners, management will not have to be Chinese in order to act like it.  Its also open to question whether or not Chinese employees of a Chinese company would even be subject to US (much less State) laws.

In the end it is all about the money.  The interests that have invested heavily in the Republican Party are not fools. They do not part with their cash without expecting a return.  The question is:  Where is the payoff?  Is it in the mining of the ore or of public opinion?  If this is about finding profits in a high cost hole by going cheap then it could be just what it appears to be.  Cut labor, cut taxes and assessment, cut corners and dont worry about the filth.  But it if is a hoax like Jauch charges the real mining has been in political gold refined from the quick silver of false promises and ground from the hard rock of blame for its predestined failure.  That could well be where the real payoff is - in a vein of voter gold.

UPDATE:  3/11/2013 - The Manitowoc Herald Times reporter is today reporting on the pending Chinese trip and potential Chinese investment in the state.

From the article:  "Walker will also be on the hunt for Chinese companies interested in investing in Wisconsin companies, seeking to build on a meeting last fall when he hosted a group of more than 50 investors from Handan, a northern Chinese city. Scott Mosley, foreign direct investment manager at WEDC, said Chinese investors are seeking to invest millions with Wisconsin businesses."

 See full article here!

Villains, Scapegoats and Hypocrites - When politics and economic interest collide

Mike Howe is by all measure a successful man.  He owns Mike Howe Builders, Inc. , is prominent in his church and community, has run for State Assembly and is currently running for City Council in his home town of Manitowoc Wisconsin.  By his own claims he made a lot of money during the housing boom having "flipped" several houses that he built, lived in and then sold.  Those were the salad days when housing prices (in particular high end homes) seemed to jump monthly and every aspiring young professional was eager to get on the wealth elevator.  The art of extracting ever more equity out of homes had been perfected by Wall Street with their Collateral-ized Debt Obligations (mortgages sold as stocks).  Any common man (even the unemployed) could buy an expensive home so you could name your price because what ever it cost today - you could sell it for more tomorrow!  Never mind you couldn't afford it because it was a sellers market and AIG had it all covered with its Credit Default Swaps.

As a Republican candidate Mike stuck to the party line advocating less government regulation and lower taxes.  After all, he had earned the money and he felt he had the right to keep it.  Requiring him to give up a portion of it in his eyes meant he had charge more for the homes he built though charging more was what "flipping" his homes was all about.  Keeping more was the ultimate and obvious goal.

But when the home piggy bank market went belly up in 2008 things got a little lean.  Prices mattered again and like all good Republican businessmen Mike had to cut costs.  And again, like all good Republican businessmen in a labor intensive trade he looked to cut labor costs.

Inocencio Lara came here from Antempan Poeblo in Mexico looking for work.  He was what we now call an "undocumented worker".  He may have had a passport but no authorization to work in the U.S. that anyone can discover.  He (along with many others like him) worked for Mares Roofing of Manitowoc owned by Marcos Mares-Flores.  Mares was a sub contractor to multiple companies in Manitowoc including Mike Howe Builders, Inc.

Lara, like most foreign workers did not want to be identified to the government.  Neither did Mr. Mares.  His company had no federal ID number, no State contractor's license and no Workman's Compensation

Workman's Comp is the law in Wisconsin

insurance policy to cover his workers.  In effect, neither men existed for tax or regulatory purposes.  There are thousands like them here and in every state in the union.  The myth about them is that they work for less. In some cases that's true.  But the reality is that they probably receive comparable pay.  The great disparity is in the mutual anonymity both employer and employee enjoy by  evading taxes and insurance costs as well as other regulatory relief.  In many ways it is business as usual in the contracting industry.  Cash payments and layers of sub contractors are par for the course in that business.  Anyone who wants to see it need only ask for quotes and inquire about cash discounts.  It is that thin below the surface.

In any other normal July day the work would have continued.  The cash would have flowed even if the paper work didnt.  But on July 9th 2011 it stopped suddenly at a work sight where Mares Roofing (such that it was) was putting a roof on a house when Inocencio Lara - the non-existent employee of a non-existent company was pinned between a truck and a dumpster resulting in his death.

The problem with a dead body is that, unlike the fictional company and non existent workers in the undocumented trades, once they materialize they are hard to explain away.  Real people, citizens, legal workers have real rights and real protections.  Protections that cost money.  Costs that can be cut - as long as no one checks.  Corpses cannot be buried in paper work even when it belongs to a successful businessman, community leader and Republican candidate.  Even when it belongs to Mike Howe.

When a real worker is injured on the job the government has decreed that compensation is owed.  Insurance must be purchased.  When a phantom of the workforce is injured what insurance company pays that has not itself been paid?

Case Number 2011CV00630
Click to expand

On September 21st 2011 Guillermina Serpio Toral filed a wrongful death suit against Mike Howe Builders, Inc., Mares Roofing and Marcos Alberto Mares-Flores.  It may not be possible to determine what the exact circumstances were in the accident.  Construction is in fact a dangerous business which is why the insurance rates are so high and (ironically) why they are so tempting to evade.  But since its obvious that no FICA taxes were paid there are no survivor's benefits for Lara's family.  With no WC policy there is no death benefit and nothing to defray medical and emergency  costs.  One has to wonder if the suit would have been filed if the protections were in place?

Libertarian Republicans like Howe like to play up the illegal immigration issue as their own.  They want to portray themselves as the defenders of American jobs and use the fear of foreign illegal/undocumented workers as a lurking menace and prescribe things like voter ID laws as the cure.  Only men like Lara are not at all interested in making themselves known to any government anywhere.  It is their competitive advantage. Yet without the blind eye the free market conservatives use to evade the realities of a hidden work force worker and their enablers like Mares would have to compete in a real labor market without the cash discount.

Who is responsible?  Is it the immigrant who comes here looking for work and finding an underground economy funded by cost cutting businessmen?  The black market in labor has willing partners on both ends but only one fully understands the risks and implications and that is the businessman who all too well understands the law and plays the risks like a roulette wheel.

As of this writing the DWD fines have not been satisfied
and I have not been able to determine the whereabouts of Mr. Mares

In a phone conversation with me Howe protested that "It's all the roofer's fault!"  Well the problem is that the "roofer" was a figment of Mr. Howe's creative business plan.  If you look at the corresponding court record for Mares Roofing the DWD has since fined "them" and now refiled the case in the personal name of Marcos Mares-Flores in effect stating that no such company ever existed.

Who is responsible for that?  Listen to what Wisconsin State Statutes have to say about it.

Independent Contractor Definition Under s. 102.07(8), Wis. Stats.
Under section 102.07(8)1 of the Wisconsin Statutes, a person is required to meet a nine-part test before he or she is considered an independent contractor rather than an employee. A person is not an independent contractor for worker’s compensation purposes just because the person says they are, or because the contractor over them says so, or because they both say so, or even if other regulators (including the federal government and other state agencies) say so. The nine-part statutory test set forth under s. 102.07(8) of the Act, must be met before a person working under another person is considered not to be an employee. To be considered an independent contractor and not an employee, an individual must meet and maintain all nine of the following requirements:
1. Maintain a separate business.
2. Obtain a Federal Employer Identification number from the Federal Internal Revenue Service (IRS) or have filed business or self-employment income tax returns with the IRS based on the work or service in the previous year. (See note below.)
3. Operate under specific contracts.
4. Be responsible for operating expenses under the contracts.
5. Be responsible for satisfactory performance of the work under the contracts.
6. Be paid per contract, per job, by commission or by competitive bid.
7. Be subject to profit or loss in performing the work under the contracts.
8. Have recurring business liabilities and obligations.
9. Be in a position to succeed or fail if business expense exceeds income.
Note: When requesting a Federal Employer Identification Number (FEIN) from the IRS, you must inform the IRS that you are required by Wisconsin Worker’s Compensation law to obtain a FEIN. A social security number cannot be substituted for a FEIN and does not meet the legal burden of s. 102.07(8).

http://dwd.wisconsin.gov/dwd/publications/wc/WKC_13486_P.pdf

With multiple State websites available to verify all of this information it would seem rather self evident that the  it is the prime contractor's responsibility to follow the law.

Then there is the puzzling focus on roofing on the Howe Builders web site.

"Mike Howe Builders Inc specializes in roofing services in the Manitowoc, WI area. We go beyond the basics with our innovative maintenance programs, extended warranties, and great customer service ensuring our customers' satisfaction and their roof's long term performance."

One has to ask the obvious.  If Howe Builders specializes in roofing then what is it doing hiring a sub-contractor to do its roofing work?

Auditing by the DWD is virtually non-existent.  Unless sub-contractor credentials are checked laundering money through fake companies like Mares Roofing is scarcely looked at by the Department of Revenue making it a tempting piece of cake for construction companies to taste since it does not take a shaded visor tax expert to implement.  Money paid out to alleged companies is simply taken as deductible expenses without any determination as to the legal status of that company what so ever.  With payroll taxes around 15%, State and Federal withholding taxes at least that again and construction Workman's Comp Insurance over 20% at least (fully half!) a hiring company can save tens of thousands in labor related tax and insurance costs on a large job.

In most cases the risk is minimal.  When illegal workers get hurt they show up at the local emergency room.  Because they often can't pay and fear detection simply leave the area.  The bills are then absorbed by local hospitals which add to legitimate costs of other companies that do abide by the law as well as providing health care benefits.

This is not a small problem and I suspect it runs much deeper.  The business address listed for Mares is an apartment building owned by yet another roofing contractor in Manitowoc who is noted for his Mexican crews.

I do not care much how this case turns out.  The events that lead to the death of Mr. Lara are for my purposes here largely irrelevant.  Accidents do happen.  I am considerably more concerned about the political duplicity in on one hand deriding illegal immigration, exploiting unfounded fears of voter fraud and criminal activity while then enabling and profiting from those same scapegoated people.  Beyond that, calling his demands for lower regulations and worker protections make the hypocrisy too kind a charge.

Men like Howe are unfit to hold public office not just because of their duplicity but more so because of the direction they would take us in the name of their own self interest.  They are the smooth faced villains of our time.

Of Conscience and Cowards

Thus Conscience does make Cowards of us all,
And thus the Native hue of Resolution
Is sicklied o'er, with the pale cast of Thought,
And enterprises of great pitch and moment,
With this regard their Currents turn awry,
And lose the name of Action.
Hamlet Act III

We are told we are unsafe and our government is incapable of protecting us and is leading us to outrageous fortune. The offered solution is to arm ourselves against that sea of troubles . The question is whether that is a path to our own destruction.

All the evidence says something else. If government is unable to protect us it is because we have defunded it while sewing the weeds of chaos. The criminals are not the ones we imagine. Whether deliberately or by accident we are much more likely to shoot ourselves than an intruder, to kill our own family or neighbor or facilitate others to do it. In Connecticut the shooter was the disturbed son of a legal owner who not only failed to keep the guns secure but exposed him to them as recreational toys. He shot her in the face with one of them. Jovan Boelcher killed his girlfriend and then himself with his own gun and not at the hand of some “criminal” and in so doing became one.

Government cannot protect us from these events as long as that kind of amoral disconnect exists because they cannot protect us from ourselves. We must therefore police ourselves and those around us. The politicians who pour that poison in our ear will lead us to still more heart ache and a thousand shocks yet to come. In their insolence of office it is not arms they ask us to bear but ills which puzzle our conscience and makes cowards of us all.

We have the right to bear arms. But here lies the rub. Rights do not exist in a vacuum. At some point judgment must rule the day. We must have the courage to tell our family and friends and leaders that these outcomes are unacceptable and in so opposing it, end it.

The Mormon and the Ferengi

As a Mormon Mitt Romney believes that the Christian God Jahova was once a mortal man from the planet Kolob who was rewarded with god-hood for being a good Mormon man there.

All devout Mormons are to be similarly rewarded with their own planets over which they will serve as gods.

It is therefore interesting to speculate on just exactly what planet that might be.  The clues are there if you choose to see them!

Mitt Romney's earthly philosophy most closely matches that of Star Trek's Ferengi.
How do we know this?  Because he lives by the Ferengi Rules of Acquisition!

The examples are everywhere.

First, see the rules here:  http://www.sjtrek.com/trek/rules/

Then google the web to see what statements he has made that fit to rules.  Here are a number of all to obvious examples.

#1.  Once you have their money never give it back!
http://www.theatlantic.com/business/archive/2012/08/mitt-romney-would-pay-082-percent-in-taxes-under-paul-ryans-plan/261027/

Mitt Romney Would Pay 0.82 Percent in Taxes Under Paul Ryan's Plan

www.theatlantic.com

Paul Ryan's plan is a path to prosperity for Mitt Romney.

#6 A Man is only worth the sum of his possessions.
"Contending that he is a self-made millionaire who earned his own fortune"
http://www.motherjones.com/politics/2012/09/secret-video-romney-private-fundraiser

SECRET VIDEO: Romney Tells Millionaire Donors What He REALLY Thinks of Obama Voters

www.motherjones.com

When he doesn't know a camera's rolling, the GOP candidate shows his disdain for half of America.

#10  Greed is eternal.
The reward for being a devout Mormon is godhood over your own planet.
http://bible-truth.org/MormonisminNutShell.html

Mormonism in a Nutshell

www.bible-truth.org

         It is common knowledge that Mormons consistently and deliberately hide

the teachings of their religion. Their main deception is that they present themselves as simply another mainline Christian denomination who believe and worship our Creator who has revealed Himself in the Bible. 

#13 Anything worth doing is worth doing for profit!
profit.http://seattletimes.com/html/edcetera/2019559387_hurricane_sandy_forces_mitt_ro.html

Hurricane Sandy forces Mitt Romney off privatizing FEMA

seattletimes.com

As local and federal emergency response teams battle floodwaters in the Northeas

t, I'm reminded of a Republican presidential debate last year in which Mitt Romney criticized theFederal Emergency Management Agency.

#16  A deal is a deal - until a better one comes along.
http://www.rollingstone.com/politics/blogs/national-affairs/mitt-romneys-biggest-flip-flops-20120801

Mitt Romney's Biggest Flip Flops | RS Editors | Politics News | Rolling Stone

www.rollingstone.com

Is GOP presidential candidate Mitt Romney a strong believer in stating your posi

tion and not wavering, as he once bragged

TUESDAY, OCT 30, 2012 10:59 AM CDT

Mitt flips on FEMA, now would keep it

Romney said he wanted to eliminate the government agency, but now he's having second thoughts

http://www.salon.com/2012/10/30/mitt_flips_on_fema_now_would_keep_it/

#23  There is nothing more important than your health - except for your money!

Romney said: “By the way, number one I get rid of is “Obamacare.” There are a number of things that sound good but, frankly, we just can’t afford them. And that one doesn’t sound good, and it’s not affordable, so I get rid of that one from day one; to the extent humanly possible, we get that out. We take program after program that we don’t absolutely have to have and we get rid of them.”

http://www.lifenews.com/2012/10/22/romney-during-debate-i-will-get-rid-of-obamacare/

#34 War is good for business.
http://www.defensecommunities.org/defense-spending-would-grow-under-romney-advisors-say/#

Defense Spending Would Grow under Romney, Advisors Say | Association of Defense Communities

www.defensecommunities.org

Mitt Romney’s national security advisors on Thursday defended the candidate’s pl

edge to devote 4 percent of the gross domestic product (GDP) to the Pentagon’s base budget, pointing out that when spending on overseas conflicts is included, the nation currently is spending 4.2 percent of its GDP

#125  You can't make a deal if you're dead!
 http://www.huffingtonpost.com/2012/06/05/mitt-romney-vietnam-war-draft_n_1571288.html

Romney Faces New Scrutiny Over Military Record -- Or Lack Thereof

www.huffingtonpost.com

SAN DIEGO — On a stage crowded with war heroes, Mitt Romney recently praised the

sacrifice "of the great men and women of every generation who serve in our armed services." It is a sacrifice the Republican presidential candidate did not make.

#144  There is nothing wrong with charity as long as it winds up in your pocket.
http://www.rawstory.com/rs/2012/10/29/bloomberg-news-romney-rented-mormon-churchs-exemption-to-defer-taxes-for-15-years/

Bloomberg News: Romney ‘rented’ Mormon church’s exemption to defer taxes for 15 years

Republican presidential nominee Mitt Romney used a loophole to “rent” the Mormon church’s tax exemption status and defer paying taxes for 15 years, according to a new report.

#221  Employees are rungs on the ladder of success.  Don't hesitate to step on them!
http://m.dailykos.com/story/2012/10/03/1139084/-The-Faces-of-Outsourcing-Bainport-s-Tent-City-Protest-in-Pictures

Daily Kos :: The Faces of Outsourcing: Bainport's Tent-City Protest in Pictures

m.dailykos.com

It all seems so abstractuntil you start talking to people. That just what we did

 when theOverpass Light Brigadevisited Bainport, IL., a protest tent-city that has been set up across from a company that is being dismantled for resettling in China. 

How many more can you find?

Orwell Comes to Manitowoc - Why I Cannot Support Jim Brey

The following is an email I sent to the Manitowoc County Democratic committee.  The specific origins of this message are less important than the fact that I have come under tremendous political pressure to drop my objections to the presence of Jim Brey in the Democratic Party and accept him as the best deal I can make to represent my values.  I do not.

[Member of the committee],

It is possible to back and forth endlessly on this subject.  Allow me to explain in a broader sense why I cannot participate in supporting Mr. Brey.

I suggest that everyone read Orwell's essay, "Notes on Nationalism".  As a professor of American History I would think it would be of particular interest to Chairman Trask.  In that essay Orwell said the following:

"By ‘nationalism’ I mean first of all the habit of assuming that human beings can be classified like insects and that whole blocks of millions or tens of millions of people can be confidently labelled ‘good’ or ‘bad’. But secondly — and this is much more important — I mean the habit of identifying oneself with a single nation or other unit, placing it beyond good and evil and recognising no other duty than that of advancing its interests.

[...]

The nationalist does not go on the principle of simply ganging up with the strongest side. On the contrary, having picked his side, he persuades himself that it is the strongest, and is able to stick to his belief even when the facts are overwhelmingly against him. Nationalism is power-hunger tempered by self-deception. Every nationalist is capable of the most flagrant dishonesty, but he is also — since he is conscious of serving something bigger than himself — unshakeably certain of being in the right."

see: http://orwell.ru/library/essays/nationalism/english/e_nat

If you believe I am saying that I support Mr. Tittl, let me state without hesitation, that I do NOT.  He is himself a nationalist which is what the TEA Party is, a nationalist movement in its truest form.  But, in supporting Mr. Brey we are no longer Democrats.  We have become nationalists ourselves.

As someone very much closer to the historical events Mr. Orwell is noted for criticizing it should come as no surprise that I take his warnings very seriously.  I refuse to participate in the self deception that supporting the likes of Mr. Brey in any way advances the cause of true Democratic values which are my sole concern.  As Ron so aptly put it, "My values are my priority".

I would hope that you could respect that and take seriously my campaign to support and defend those values which I always believed we had in common as Democrats.

Bernie

Romney and Walker's Rotten Fruit

An Arab proverb states, “And tomorrow there will be apricots!” It expresses cynicism in the hollow promises of politicians.

According to Mitt Romney's new TV ad “It's not working for Wisconsin....” and promises 240,000 new jobs. The choice of that slogan is strangely confusing since it is the reverse of Governor Walker's own slogan which claims that it “is working”. Just exactly what is (or is not) working seems to depend upon what the meaning of “it” is.

Is “it” the stimulus? Can't be that because Walker sent that program packing.

“It” cannot be the billions Walker yanked from public schools and local governments because that's budget cutting and budget cutting is good according to Romney & Ryan.

What quarter million jobs are we talking about? Are they the same jobs promised by Walker?

Or are they in compensation for the quarter million jobs we are on pace to lose in Walker's term?

“It” seems to mean that Wisconsin has somehow been held back by national policy. More likely “it” means that the nation is being held back by massive job losses in states like Wisconsin and New Jersey that swallowed the bitter fruit of Republican austerity.

In the 1930's John Stienbeck wrote of people starving while picking the fruit they could not afford to buy and surpluses were dumped in ditches. The great lie that threatens to starve us is the hollow promise that prosperity will be delivered by a new crop of growers who will hire more pickers if they can just be made to work a little cheaper and live a little meaner. But there are no apricots or anything else coming. The fruit of our labor has all been dumped in the ditch of corporate interests.

Tax Credits and the Reality of Job Creation

This is a letter to the editor I wrote back in July and published at www.htrnews.com
I dont have the original link but Im posting it here now in order to preface some other new material on the issue of tax credits as a tool to stimulate the economy and why they do not work...

We were told we were broke. No money for schools, for cities, recycling, public works much less public employees. Amid a blizzard of misinformation and bogus budget numbers we were convinced to give up billions in state aids on the promise that teachers and public servants were the cause of it all and someone had to pay.

What it paid for was a massive tax credit program that has extended hundreds of millions to corporations promising to create jobs for cash. Plexus Corp in Appleton was given fifteen million to supposedly create 350 jobs at a cost of nearly $43,000 per job. Kohls department stores got another 62 million and they are just the latest.

Prosperity was just around the corner. All Manitowc had to do was suffer an 11% increase in the school tax. Valders now much the same with Chilton not far behind. The cities took the same hits. Then lay off dozens. Hundreds district wide.

This week Plexus announced the layoff (not hire) of 116. In making the announcement a company spokesman said that they “...made the layoffs in response to a decrease in customer orders.” Wait? Weren't we told that investment creates jobs? That tax cuts drive investment? Did we misunderstand?

It seems that customers create jobs. So says Ginger Jones, CFO of Plexus Corp. Tax credits not so much.

Unemployed public workers make poor customers. No less so the workers at Plexus who will not receive their first week's unemployment because that was cut too. So it is for the other 13,000 who lost their jobs in June. But Plexus got its 15 million and no doubt the board will reward Ms. Jones well. The employees at Kohl's hope she is a big customer there. The unemployed shop at Wal Mart.

You may also find this link interesting...
http://tpmdc.talkingpointsmemo.com/2012/09/crs-study-taxes-economic-growth.php?ref=fpa