PRESIDENT OBAMA’S CRONY CAPITALISM
http://www.washingtontimes.com/news/2011/jan/24/obamas-crony-capitalism/
EDITORIAL: Obama’s crony capitalism
(GE)Government Electric, (GM)Government Motors; what industry is next?
President Obama is continuing his outreach to American business, though the principal business he wants to reach out to is General Electric. Mr. Obama seems to have decided that what’s good for GE is good for America, or at least for himself.
It has been a banner year in government largesse for America’s fourth-largest corporation. This month, the Federal Communications Commission approved the 51 percent/49 percent NBC Universal joint venture between Comcast and GE. Last week, GE announced a White House-backed plan for another joint venture with a Chinese avionics company. Mr. Obama capped the good news by naming GE Chief Executive Jeffrey R. Immelt as head of the President’s Council on Jobs and Competitiveness – this after GE eliminated 18,000 U.S. jobs in 2009 (the most recent data available).
Times certainly have changed since the summer of 2010, when Mr. Immelt was quoted telling Italian businessmen America was in a “terrible” national mood during the “tepid” economic recovery and that U.S. business disliked Mr. Obama as much as Mr. Obama disliked business. GE later said those comments were “taken out of context.” Mr. Immelt says he’s worried about China because he’s “not sure that in the end they want any of us to win, or any of us to be successful.” He apparently, however, is willing to give the People’s Republic access to advanced American aerospace technology. On Monday, Mr. Obama claimed the $45 billion in deals with China his administration brokered would create 235,000 new U.S. jobs. Even if that figure turns out to be true, it would equal just 58 percent of the new unemployment claims filed last month alone.
Last summer’s grumbling aside, Mr. Immelt has long been an Obama champion, seeing opportunities for profit in the administration’s emphasis on so-called green technologies and in opening foreign markets. The GECEO envisions a future with less emphasis on free markets and more “coordinated commitment among business, labor and government.” In 2009, he praised government intervention in the economy, telling shareholders that “in a reset economy, the government will be a regulator; and also an industry policy champion, a financier and a key partner.”
One example of partnership in action is the $24.9 million in stimulus money GE received, primarily for “green technology” projects. This payout was only slightly more than the $23.4 million GE forked over last summer to settle charges brought by the Securities and Exchange Commission that the corporation had violated the Foreign Corrupt Practices Act by paying kickbacks to Iraqi government agencies to win domestic infrastructure building contracts. Whether the White House will continue to oppose General Electric‘s alternative engine for the Joint Strike Fighter – or will grant the corporate giant the same Obamacare waivers it has given many of its major labor-union supporters – remains to be seen.
Mr. Immelt‘s coziness with the Obama team could be bad for business in the long run. His chummy relationship with Mr. Obama will bring heightened scrutiny from Congress to investigate whether the company is reaping unfair advantage. Despite Mr. Obama‘s repeated claims of opposing corporate lobbying, GE has spent more than any other business to lobby the Obama White House. On Monday, FreedomWorks and the Free Enterprise Project launched a campaign to have Mr. Immelt replaced as GECEO, calling him a “poster child of what’s wrong with business leaders today.”
Many consumers may be turned off by the GE brand knowing it has Mr. Obama‘s personal seal of approval. What’s good for General Electric may be wonderful for the president but not so great for Middle America.
Comments are closed.
