GE HEARTS OBAMA

[JG55]

He melt for Obama

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January 22, 2011 Posted by Scott at 6:43 AM

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The alliance between big government and big business should raise the hackles on the necks of ordinary citizens. In the cases of GM and Chrysler, we have seen a variety of wrongs committed with government power and taxpayer money. Harnessed to the power of government, big business can really get cracking.

It can sell products to big government. It can bulk up on direct and indirect subsidies derived from the labor of ordinary citizens. It can take pressure off pricing by creating barriers to entry for potential competitors. It can mitigate the difficulty of persuading ordinary citizens to buy what they are selling at a price that reflects market value.

Before the GM and Chrysler bailouts, GE chief executive officer Jeffrey Immelt saw the money to be minted in environmentalism. GE would hold itself out as an environmental leader under the rubric of Ecoimagination. Then it would join up with big government, promote the global warming hoax and cash in on it through the regulatory regime of cap-and-tax. Ecoimagination is the public relations campaign that in part represents GE's strategic partnership with big government. See, for example, the friendly 2005 Forbes article "GE turns green."

GE got a taste of the good life when it got in on the bank bailout. As the Washington Post reported in a major article in mid-2009, GE had quietly become the biggest beneficiary of one of the government's key bank bailout programs. At the same time GE also avoided many of the restrictions faced by the big banks

The Post noted that GE did not initially qualify for the Temporary Liquidity Guarantee Program, under which the government guaranteed debt sold by banks: "But regulators soon loosened the eligibility requirements, in part because of behind-the-scenes appeals from GE."

GE thus joined the big banks collectively saving billions of dollars by raising money for their operations at lower interest rates. The Post reported that GE Capital had issued nearly a quarter of the $340 billion in debt backed by the TLGP. The government's actions have been "powerful and helpful" to the company, Immelt acknowledged in December 2008. More recently, Matt Kibbe showed just how helpful in "GE: Imaginative rent-seeking at work."

The cap-and-tax regime promoted by the Obama administration would pay off handsomely for GE. Immelt made his pitch to a Dartmouth crowd in August 2008. "The Wall Street Journal hates all this stuff," Immelt helpfully explained. "They claim global warming's a hoax...I have to deal with this regulation at work every day. You can't afford to be ideological." Hey, I know know what you mean.

It helps to have friends in high places. Immelt has supported and befriended Obama. That cap-and-tax thing must have formed a part of Obama's appeal to Immelt. When it comes to making money, you can't afford to be ideological.

Yesterday President Obama named Immelt to head his new Council on Jobs and Competitiveness panel. Immelt took to the pages of the Washington Post to explain: "The president and I are committed to a candid and full dialogue among business, labor and government to help ensure that the United States has the most competitive and innovative economy in the world." Fred Barnes briefly explicated the appointment more straightforwardly in "Jeffrey Immelt, Obama's pet CEO."

UPDATE: Via Drudge, I see that Chris Stirewalt reviews Immelt's support for picking the taxpayers' pockets via GE's strategic partnership with big government.

And Joseph Lawler includes another good quote in "What's good for Jeffrey Immelt is what's good for America": "The fact that I'd like GE to work in concert with where government policy is in the U.S. doesn't mean that I'm a traitor or a bad guy, I think it's just being practical that that's gotta happen." Jeff, you're coming through loud and clear!

part 2

He melt for Obama, cont'd

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January 25, 2011 Posted by Scott at 6:15 AM

In "He melt for Obama," I explored the strategic partnership between GE and big government. It has really come into its own in the Age of Obama. Tim Carney explains why Obama's friendship with GE and its chairman/chief executive officer Jeffrey Immelt represents crony capitalism at its worst. Carney also cites the Washington Post op-ed column by Immelt that we quoted:

Subsidies are GE's lifeblood, and Immelt's own words make that clear. In his op-ed announcing his appointment, Immelt called for a "coordinated commitment among business, labor and government," and wrote that, "government should incentivize ... investment in innovation." He also advocated "partnership between business and government on education and innovation in areas where America can lead, such as clean energy, are essential to sustainable growth."

This is Immelt's style. Days after Obama's inauguration, the chief executive officer wrote to shareholders of a post-bailout "reset" in the global economy. "In a reset economy, the government will be a regulator; and also an industry policy champion, a financier, and a key partner."

Carney has been on this beat for a while. Do not miss his August 2009 column "How GE's green lobbying is killing US factory jobs." In that column Carney explores GE's role in advancing the legislation that will kill the incandescent light bulb. I have written about the legislation in several posts including "Get your hand out of my shower" without understanding GE's role in promoting it. The GE part of the story provides a valuable case study that illuminates, shall we say, the big picture.

Today Carney makes this essential point:

[W]herever Obama has led, GE has followed. Obama has championed cap and trade in greenhouse gasses, and GE has started a business dedicated to creating and trading greenhouse gas credits. As Obama expanded subsidies on embryonic stem cells, GE opened an embryonic stem-cell business. Obama pushed rail subsidies, and GE hired Linda Daschle -- wife of Obama confidant Tom Daschle -- as a rail lobbyist. GE, with its windmills, its high-tech batteries, its health care equipment, and its smart meters, was the biggest beneficiary of Obama's stimulus.

To get these gears in sync isn't cheap: The company has spent $65.7 million on lobbying during the Obama administration -- more than any other company by far. So much for Obama's war on lobbyists.

For much of the media, the nuances will be lost: You're either pro-business or anti-business. But the distinction is crucial between making a profit through subsidy, regulation, and bailouts on one hand, and competition and innovation on the other hand. The latter creates wealth. The former consumes it.

While Obama's favors for the likes of GE, Google, Pfizer, and Boeing should demolish his finely honed image as the scourge of the special interests, the real problem is not hypocrisy -- or that GE's profits and share prices are soaring. The problem with Obamanomics is that it kills the very entrepreneurship that Obama is always touting.

In partnership with Obama, GE exploits the power of big government to enrich its shareholders while making the rest of us poorer and less free.