Data Sheet—How Wisconsin Governor Scott Walker’s Foxconn Deal May Have Cost Him the Election

Did Scott Walker’s multi-billion dollar deal with Foxconn cost him the Wisconsin governor’s race? It certainly didn’t help.

Walker, the Republican incumbent, lost his bid for a third term yesterday by a 1.1 percentage point margin to Democrat Tony Evers. Health care, taxes, education, and immigration all were key issues in the campaign. But, as widely reported (see these excellent pieces in The Verge and the New Yorker) and discussed in this space last week, Walker’s cocktail napkin agreement with Foxconn, the Taiwanese company that is the world’s largest contract electronics manufacturer, proved a huge political albatross. Walker offered $3 billion in state subsidies in exchange for a promise from Foxconn to build a $10 billion liquid crystal display factory in Racine County. The facility was to generate 13,000 jobs.

But voter enthusiasm turned to indignation as public expenses required to support the plant ballooned—and Foxconn’s ambitions seemed to shrivel. As I noted last week, a string of vague and inconsistent statements by Foxconn officials about their plans for the plant raised suspicions that its main product was smoke and mirrors.

And the case gets curiouser and curiouser. Yesterday, as Wisconsin voters headed to the polls, the Wall Street Journal, citing “people familiar with the matter,” said Foxconn planned to staff the Wisconsin plant with engineers from China. Part of the problem, the Journal noted, is Wisconsin’s tight labor market; the state has an unemployment rate of 3.0%, below the national average of 3.7%. Finding skilled labor and “knowledge workers,” (as Foxconn now says will account for 90% of the plant’s workforce) is an even bigger headache. Foxconn denied the report in a written statement: “The assertion that we are recruiting Chinese personnel to staff our Wisconsin project is untrue.” The Journal reports that Foxconn engineers in China are balking at transfer orders from CEO Terry Gou because they think Racine is too remote, too cold, and “not particularly diverse.”

Scott’s defeat highlights the peril of playing the China card. Trump invoked China repeatedly in barnstorming for Republican candidates in recent days, repeating his claim that tariffs on Chinese imports have instilled panic in Beijing, and dangling the prospect of a breakthrough on trade disagreements when Trump and Xi meet for dinner following the Group of Twenty summit in Buenos Aires.

My guess is that, Larry Kudlow’s denials notwithstanding, Trump himself is angling for some kind of truce—not necessarily because his party lost control of House yesterday, but because he knows he’s painted himself into a corner for 2020. If the stalemate with China drags into next year, Trump will have to make good his threat to slap tariffs on all Chinese imports and raise rates to 25% from the current 10%. That would push up prices and invite the Federal Reserve to jack up interest rates—neither of which would bode well for Trump’s own prospects for re-election.

NEWSWORTHY

Making a difference. It was election day across the country on Tuesday, you might have noticed. In very tech-oriented results, San Francisco voters approved Proposition C, increasing the city's gross receipts tax by one-half percentage point on companies with at least $50 million in revenue to raise money for addressing homelessness. "Let the city come together in Love for those who need it most! There is no finish line when it come to helping the homeless," tweeted Salesforce CEO Marc Benioff, who favored the measure.

Sharing is caring. In a possible body blow to its primary business model, Qualcomm lost a federal court ruling and could be required to license some of its key wireless technologies to rival modem makers. District Court Judge Lucy Koh on Tuesday approved a motion for partial summary judgment from the Federal Trade Commission, finding that "Qualcomm cannot discriminate against modem chip suppliers." Qualcomm will likely appeal and Wall Street was unfazed. After an initial dip, Qualcomm's stock finished the day about unchanged.

Not unhappy about not touching that. New York City's Metropolitan Transit Authority will do away with paper fare cards next year in favor of a contactless payments system in subway turnstiles. I am pretty sure this means mobile payment apps like Apple Pay and Google Pay will also work.

Vocal changes. The head of Microsoft's Cortana digital assistant project, Javier Soltero, is leaving the company. Cortana's design director, Samuel Moreau, left Microsoft last month. The moves follow CEO Satya Nadella's decision to shift the Cortana effort from Microsoft's A.I. unit to its Experiences & Devices team.

Burning the midnight oil. I find this study hard to believe, but I have neither the cryptocurrency nor electricity-calculating knowledge to dispute it. Researchers at the Oakridge Institute for Science and Education in Ohio say mining bitcoin (via computer) requires about three times more energy per U.S. dollar than mining gold and other metals. Aluminum mining, however, required substantially more energy than all other metals and cryptocurrencies compared in the study.

Burning down the house. It's mostly speculation how rising interest rates could hurt tech stocks, but not at one tech stock in particular. Real estate listing app Zillow reported its third quarter revenue grew 22% to $343 million, but warned that fourth quarter revenue would be $340 million to $357 million. Analysts had expected closer to $370 million, missing how higher rates were already slowing the housing market. Zillow's stock dropped 19% in premarket trading on Wednesday.

FOOD FOR THOUGHT

It seems almost obvious that computerizing health care records should be a good thing, making doctors' and patients' lives easier and safer. It's also probably obvious that no digital transition is more complex and fraught with challenges, even life-threatening ones. Doctor and brilliant New Yorker writer Atul Gawande has an important story to tell about the medical industry's effort to digitize. Read the entire piece. Here Gawande explains the challenges faced by fifty-year-old primary-care physician Susan Sadoughi:

Each patient has a “problem list” with his or her active medical issues, such as difficult-to-control diabetes, early signs of dementia, a chronic heart-valve problem. The list is intended to tell clinicians at a glance what they have to consider when seeing a patient. Sadoughi used to keep the list carefully updated—deleting problems that were no longer relevant, adding details about ones that were. But now everyone across the organization can modify the list, and, she said, “it has become utterly useless.” Three people will list the same diagnosis three different ways. Or an orthopedist will list the same generic symptom for every patient (“pain in leg”), which is sufficient for billing purposes but not useful to colleagues who need to know the specific diagnosis (e.g., “osteoarthritis in the right knee”). Or someone will add “anemia” to the problem list but not have the expertise to record the relevant details; Sadoughi needs to know that it’s “anemia due to iron deficiency, last colonoscopy 2017.” The problem lists have become a hoarder’s stash.

“They’re long, they’re deficient, they’re redundant,” she said. “Now I come to look at a patient, I pull up the problem list, and it means nothing. I have to go read through their past notes, especially if I’m doing urgent care,” where she’s usually meeting someone for the first time. And piecing together what’s important about the patient’s history is at times actually harder than when she had to leaf through a sheaf of paper records. Doctors’ handwritten notes were brief and to the point. With computers, however, the shortcut is to paste in whole blocks of information—an entire two-page imaging report, say—rather than selecting the relevant details. The next doctor must hunt through several pages to find what really matters. Multiply that by twenty-some patients a day, and you can see Sadoughi’s problem.

IN CASE YOU MISSED IT

A.I. Could Help Humans Break Out of Their Echo Chambers By Radhika Marya

CEOs Should Be Worried About Automation, Populism, and Data Manipulation By Erika Fry

Period Tracker Clue Found 'Sadness' Among Users After 2016 Election By Emma Hinchliffe

How AMD Is Trying to Press Its Advantage Against Intel—And Boost Its Stock Price By Aaron Pressman

Google Chrome's Newest Version Will Block 'Abusive' Pop-Up Ads By Emily Price

Facebook Removed 115 Accounts in the Run-Up to the Midterm Elections By Don Reisinger

BEFORE YOU GO

Not to sound too much like Old Man Tech guy, but I loved former Macworld editor Jason Snell's examination of the growing use of magnets in our computing devices:

There was a time when magnets were the most terrifying things in computing. Magnets erased floppy disks and tape cassettes and even hard drives. But in the modern era, magnets are our friends.

This edition of Data Sheet was curated by Aaron Pressman. Find past issues, and sign up for other Fortune newsletters.