[carterehsmith]

So... Foxconn can get tax breaks, and environmental regulation exemptions, good for them, but what about other businesses?

Say I have a business (does not have to be in Wisconsin... say, Texas) doing something similar to Foxconn. So I have to pay taxes - no tax breaks as for Foxconn, and no environmental regulation exemptions.

So now, how can my business compete with Foxconn? They get all the breaks and I get none. Basically, that will shut my business down. Employees will be fired, shareholders will lose their money, etc.

That should be added to the tally when we are looking at the overall impact of such sweetheart (for the Foxconn) deals on the economy.

[dcow]

Let's go one step further.

No states are allowed to favor FC because it might risk an incumbent. FC takes business to Canada. Canadian economy is now slightly stronger than the US, USD drops slightly. Zero US jobs were created.

[carterehsmith]

>> Canadian economy is now slightly stronger than the US

But... is it? That was kind of my point. It is not clear at all.

So in Canada in particular, I remember big issues with the likes of GM and Ford. Here is what happens:

1/ Government attracts GM with tax breaks, will finance infrastructure, provide loans etc, etc.

2/ GM says "great". Builds the plant, employs people. This is the good part.

3/ Once the tax breaks expire, GM declares that the plant is not profitable anymore and shuts it down.

4/ So... was the plant beneficial to Canada? Depends who you ask. Some pundits add the numbers and say that Canada lost money in the deal, some say Canada gained.

What is obvious is that government spent a boatload of money to provide a job to like 3,000 people for three years.

Some argue that it would have been much cheaper to just give that money to random 3,000 people.

[matt4077]

Just put provisions against state aid in NAFTA.

It works pretty well for the EU. No more race to the bottom in environmental regulation or taxation.

[gcb0]

your plan sounds good until you remember that suggesting gov regulation in the US will get you killed as a mutant commie.

*intellectual property mafias exempt.

[thinkloop]

I like this next step, but once you cross countries it gets significantly more complex. I doubt Canada would be a drop-in replacement.

[mcny]

Let's say there are no nationwide standards. Texas attracts a California company with no minimum wage, no taxes, very little regulations. In this imaginary situation, Texas "created" jobs. But we are all worse off.

It seems like we cannot leave anything we consider important to the states or local government or we risk a race to the bottom.

[sokoloff]

Or maybe we should leave everything possible to the states, so that we collectively get the most competitive system versus the world.

I don't think that we should toss out all federal standards, but I do worry about the pretense that we can operate our states as a giant cartel/union who collectively agree to not sharpen their pencils "against" each other, rather than seeking to be genuinely competitive in a world market.

[mcny]

> I do worry about the pretense that we can operate our states as a giant cartel/union who collectively agree to not sharpen their pencils "against" each other

Of course, no sane person will disagree with what you said. This is why we need international diplomacy (carrots and sticks) to force the world to follow suit. I think there are several problems and we can't please everyone. In my example, it is little consolation to tell someone in California that their jobs aren't going overseas. "Don't worry. It is just going to Texas. Nothing to see here. Move along." What good does it do to them? Should they just move to Texas following the jobs? What will happen is standards will lower everywhere.

Here is an outrageous idea (don't actually do this): disband these united states and all states individually join the European Union. We will quickly see how important the federal government has been for each and every one of us in the world stage.

[sokoloff]

I suspect I'd agree with you over beers more than is apparent on HN text, as we naturally focus on and discuss the differences much more than the agreement.

In your hypothetical, should we tell the person in Texas who doesn't get the new/moved job, "Don't worry; you are going to stay unemployed because someone in California is doing that job, not someone overseas."?

[dsfyu404ed]

So be it. Ensuring CA jobs stay in CA is something the 49 other state governments should give exactly zero shits about. Their responsibility is to their constituents not some other state. If CA doesn't like it that's exactly the kind of thing the federal government exists to mediate.

[projektfu]

The usual scam is for your Texas company, if it is large enough, to start a public search for a new place of business, and encourage other cities to submit open bids. As they race to the bottom, your own city and state will feel like they should offer you tax breaks to stay. So you accept those, and you get free money. Or, if your intention as CEO was to move closer to your kids in Denver, then you accept their offer.