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.