Posted by: Debby Durkee | January 23, 2011

Can GE and Immelt be trusted?

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Can GE and Immelt be trusted?

With Obama’s announcement of General Electric CEO Jeffrey Immelt to head his new Council on Jobs and Competitiveness, replacing Paul Volker’s Economic Recovery Advisory Board, many are wondering if Immelt is in this for the country or for his company. GE has gotten TARP funds (um, when did the company become a bank?) and has used taxpayer funds over and over again to gain a leg up on the competition, so it’s rather ironic to have someone who gains an unfair advantage as a way of doing business to serve as the leader of a board with the word “competitiveness” in it. This is from Chris Stirewalt at Fox News.

When Democrats said President Obama was “pro-business,” we didn’t know they meant one business in particular.
There are a few companies on the Obama corporate A List – Democratic patrons Google and Goldman Sachs both turn up again and again at White House functions and for special recognition – but no company seems to get the VIP treatment that General Electric receives.  Snip –

Whether it is pushing the president’s plan for global warming fees in order to create demand for his “Ecomagination” line of windmills, solar panels, etc., boosting the president’s national health-care law as part of an effort to sell more medical equipment, or enthusing over the Obama strategy of making loans available for industrial exporters, Immelt has been an Obama stalwart all along. Immelt has also consistently argued to shareholders that there is big money to be made in advancing the Democratic agenda.
While most corporate leaders have taken a wait and see approach to Obama’s occasional overtures to the private sector, G.E., along with Google, Goldman and few others, have backed him to the hilt.  Snip —

(And, is it a coincidence that all three companies start with the letter “G”? Is there some hidden meaning there? What’s next, GAP? General Mills? Goodyear?  – that’s a joke, y’all.)

Though intended to show Obama’s coolness with corporate America, the Immelt pick will likely reinforce the perception in American boardrooms that Obama likes to play favorites when it comes to the economy.

He’s visited so many battery makers that his staff must now be coated in a thin layer of nickel-cadmium. And while Obama plays rough with the oil and coal industries, he can’t say enough good about technology firms and “green jobs.”  Snip –

The suspicious eye that will be cast on Immelt…may lessen his ability to provide the connection to the business world Obama has promised. Other CEOs are unlikely to see a competitor who pushes policies explicitly to benefit his company as an ally in the fight for a fair, free market.

I think this is called the fox guarding the henhouse. Will this pick really ease the uncertainty in the  American business community?  Please read all of Stirewalt here:

http://www.foxnews.com/politics/2011/01/21/obama-teams-ge-iran-palaver-peters-arrives-white-house/

Scott Johnson over at Powerline blog certainly sees the conflict of interest and the theft from taxpayers whenever business and government start holding hands.

…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. Snip –

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.

Can you say “unfair competition?” Just as exceptions have been made for over 200 companies in the implementation of Obamacare, so too Obama showers favorite companies with gifts, all courtesy of the American taxpayer.

Read all of Johnson here: http://www.powerlineblog.com/archives/2011/01/028187.php

Matt Kibbe also shows the despicable alliance of government and business and how it distorts both while using your taxpayer dollars to line the pockets of businessmen and politicians and ends up raising prices that you pay in the end. This is from Townhall.com.

…Many corporations have come to rely on government largesse rather than innovation and entrepreneurship to boost their bottom lines, something that has only been reinforced by the Obama administration’s aggressive expansion of the government’s control of the U.S. economy. Stimulus spending, health care legislation, and financial services legislation have inserted Washington squarely into activities best decided by the marketplace. Politicians-many of whom decry the role of special interests in Washington-enjoy these new levers of power and the lucrative fundraisers sponsored by those seeking to do business in the world that Congress has created.

With New York and Washington continuing to blur the distinction between the private and public sector, many corporations have set up shop in the nation’s capital, with an army of lobbyists working to turn the law in their favor. Few corporations better represent the crony capitalism business model than GE. Hardly described as a bank, GE became a major recipient of the bailout, issuing some $74 billion in debt backed by taxpayers under the Temporary Liquidity Guarantee Program-a program that GE persuaded the government to expand so it qualified as a recipient. At the same time, GE managed to avoid new federal restrictions on executive compensation required under the TARP program.

Elsewhere, GE has joined forces with a number of other companies under the banner of USCAP to endorse a costly cap and trade energy program that would drive up the costs of fossil fuels while promoting new forms of energy.

forcing American consumers and businesses to subsidize their forays into green energy … Estimates from a number of sources suggest costs could be as much as $1,700 per year per family, and that up to 2.5 million jobs could be lost. At the same time, America’s competitiveness will be threatened as jobs and production move offshore to nations such as Brazil, India, and China, which have indicated that they are not willing to hobble their economies with new regulations to reduce greenhouse gas emissions…

Consumers and the U.S. economy would bear the burden of this energy policy, but GE and other companies view the bill as an opportunity to legislate profits…Snip –

GE typifies the large rent seeking companies that wage battle not in the marketplace, but in the halls of Congress. Taxpayers and consumers cannot afford to fund the pet projects of politicians and corporations, especially in an economic downturn. Unfortunately, the consumer’s voice has been lost in the din of corporations scrambling for government handouts.

When business and government are in bed together, there usually isn’t an up side for the American people. Both have betrayed the interests of the country for their own long or short-term gain. This is no way to bring a country back from the brink of destruction. I have little faith that Immelt will do right by the country when he has a company to run. Read it all here: http://townhall.com/columnists/MattKibbe/2010/09/15/ge_imaginative_rent-seeking_at_work

Will Immelt convince Obama to lower corporate taxes?

Larry Kudlow has a slightly, if not hopeful, take on the appointment of Immelt. Immelt used to be Kudlow’s boss at MSNBC. He has high hopes for a cut to corporate taxes. This is from http://www.realclearpolitics.com.

Can GE CEO Jeffrey Immelt talk President Obama into a major corporate tax cut?…

Regarding the new President Obama, I am still trust but verify. But yes, of course, Jeff Immelt is a businessman through and through. He is a trustee of the Ronald Reagan Presidential Foundation board, while GE is a big sponsor of the Reagan Centennial Celebration. (Recall that the Gipper worked for GE as a spokesman and television host from 1954 through 1962.) He’s also a registered Republican who contributed to both Hillary Clinton and John McCain during the 2008 campaign. And last year, he harshly criticized Obama at a dinner in Italy, where he basically said: Obama doesn’t like business, and business doesn’t like Obama.  Snip –

…I believe he will, in fact, push for corporate tax reform.

There’s nothing more important than full-fledged corporate tax-rate reduction in order to maximize U.S. economic growth. At 35 percent, our highest-in-the-world corporate tax should be knocked all the way down toward 20 percent.

And businesses taxes should be made territorial, not worldwide, in order to stop the double-taxation of foreign earnings. Business revenues held overseas, now reported to be about $1 trillion, should be repatriated to the U.S. with a 5 percent tax holiday. Snip –

…my former boss Jeff Immelt (GE is selling NBC Universal to Comcast) can play a key role in a hugely important corporate tax cut. This will incentivize firms to stay at home instead of going overseas. It will be a huge job-creator, reducing unemployment and playing an important part in deficit reduction. According to the Congressional Budget Office, a 1 percentage point increase in GDP above the meager 2.5 percent baseline would lower the 10-year budget gap by nearly $3 trillion.

Growth solves a lot of problems. Can Immelt get the job done?

If Immelt gets Obama to cut corporate taxes that will be a plus, but what will the country have to give to get that?

Read all of Kudlow here: http://www.realclearpolitics.com/articles/2011/01/22/ges_immelt_on_the_hot_seat_108636.html

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Responses

  1. Can Immelt & Obama be trusted? NOPE!!


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