This story originally appeared at Truthdig. Robert Scheer is the author of The Great American Stickup: How Reagan Republicans and Clinton Democrats Enriched Wall Street While Mugging Main Street (Nation Books). If it had been revealed that Jeffrey Immelt once hired an undocumented nanny, or defaulted on his mortgage, he would be forced to resign as head of President Barack Obama’s “Council on Jobs and Competitiveness.” But the fact that General Electric, where Immelt is CEO, didn’t pay taxes on its $14.5 billion profit last year—and indeed is asking for a $3.2 billion tax rebate—has not produced a word of criticism from the president, who in January praised Immelt as a business leader who “understands what it takes for America to compete in the global economy.”
How long will the US and its allies ignore the elephant in the room posed by an alliance for human rights and anti-terrorism with regimes in the Middle East that stand for neither?
Sorry, President Obama, but there is a dimension of fear properly associated with the word nuclear that is not matched by any oil spill.
@LucyKafanov guess on Friday I have to go back to Russia then. Oh well
will be on MSNBC in 5 or 10 mins
What it takes, evidently, is shifting profit and jobs abroad: As of last year only 134,000 of GE’s total workforce of 304,000 was based in the US and according to the New York Times for the past three years 82% of the company’s profit was sheltered abroad. Thanks to changes in the tax law engineered when another avowedly pro-business Democrat, Bill Clinton, was president, US multinational financial companies can avoid taxes on their international scams. And financial scams are what GE excelled in for decades, when GE Capital, its financial unit, which specialized in credit card, consumer loan and housing mortgage debt, accounted for most of GE’s profits.
That’s right, GE, along with General Motors with its toxic GMAC financial unit, came to look more like an investment bank than a traditional industrial manufacturing giant that once propelled this economy and ultimately it ran into the same sort of difficulties as the Wall Street hustlers. As the New York Times’ David Kocieniewski, who broke the GE profit story, put it: “Because its lending division, GE Capital, has provided more than half of the company’s profit in some recent years, many Wall Street analysts view GE not as a manufacturer but as an unregulated lender that also makes dishwashers and MRI machines.”
Maximizing corporate profits at the taxpayer’s expense is what top CEOs are good at, and after all it was Immelt who presided over GE when it got so heavily into the subprime mortgage business that it needed a government bailout to avoid bankruptcy. This was before Obama made him a trusted adviser.
Back at the end of 2008, Bloomberg reported that the US government had agreed to insure an additional $139 billion in GE Capital’s debt holdings, the second such intervention within a month, adding, “The company’s exposure to the deepest financial crisis since the 1930s has cut its market value by more than half this year.” A Washington Post exposé titled “How a Loophole Benefits GE in Bank Rescue” documented the power of Immelt’s lobbying operation in Washington. GE was not initially deemed eligible for the debt guarantee program offered to failing banks, “but regulators soon loosened the eligibility requirements, in part because of behind-the-scenes appeals from GE.” And it worked; as the Post reported, “The government’s actions have been `powerful and helpful’ to the company, GE chief executive Jeffrey Immelt acknowledged.” For the next two years, GE would still report enormous profits without paying taxes, adding insult to the injury that financial shenanigans had inflicted on ordinary taxpayers who bailed the company out.
On Feb. 6, 2009, Immelt sent a contrite annual letter to GE shareholders, admitting, “Our Company’s reputation was tarnished because we weren’t the ‘safe and reliable’ growth company that is our aspiration.” While conceding his own culpability in GE’s downturn, Immelt predicted a rosy future: “I accept responsibility for this. But, I think the environment presents an opportunity of a lifetime.”
Not, obviously, for the 50 million Americans who have either lost their homes or are deeply underwater in a housing market that is still in steep decline thanks to the lending practices of companies like GE Capital. Nope, the good times are in the offing only for corporations that know how to make the US government a partner in their scams. As Immelt stated blatantly: “The global economy, and capitalism, will be `reset’ in several important ways. The interaction between government and business will change forever. In a reset economy, the government will be a regulator; and also an industry policy champion, a financier, and a key partner.”
That’s the essential blueprint for Obama’s restructuring of the economy, as the president put it in selecting Immelt to replace Paul Volcker as head of his outside team of economic advisers. Volcker had become increasingly critical of the corporate high rollers. Obama, although noting the suffering of ordinary Americans, clearly believes that such populism is now beside the point. As the president put it in announcing Immelt’s appointment on Jan. 20, 2011: “The past two years was about moving our economy back from the brink. Our job now is putting our economy into overdrive.”
But overdrive, with CEOs like Immelt shifting the gears, is what brought us so close to the brink. Once again Obama seems fatally addicted to the notion that the heavy hitters who got us into this mess are the very folks to be trusted to get us out of it. What he seems incapable of grasping is that while they are personally very good at avoiding the precipice, the rest of us are hardly passengers in their limos.
Robert Scheer is the author of The Great American Stickup: How Reagan Republicans and Clinton Democrats Enriched Wall Street While Mugging Main Street (Nation Books).
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Robert Scheer should hang it up. He writes the same column endlessly, possibly because he has nothing to say anymore.
Ya know Yad, you are forever saying how inexperienced Obama is , like what experience did Reagan or Bush 2 or Clinton have? Obama has enough advisers to tell him what to do, as did past presidents, so the "hes not experienced" crud really doesn't mean as much as you wish it did.
I see two complaints about GE: they don't employ enough US citizens and they don't pay enough US taxes. Well, I'm sure we can find lots of companies, especially Venezuelan and Russian oil companies, that fit that profile!
OK, joke.
But, seriously, America, in 2008 you voted for a man with no thought out and consistent principles in an era that calls for difficult choices, no legislative experience to speak of, no executive experience at all, no diplomatic experience, no experience in the labour movement, no managerial experience either in a government agency or in the private sector, no experience in law either as a jurist or scholar or litigator, no military experience when we were in two (now three!) wars, no training in foreign languages or cultures when we were involved in a tortuous conflict with terrorist ideology, no training in history or some other area that would help him understand the world, no training in the hard sciences that would help him understand fundamental issues of the modern world such as genetics or nuclear power, no experience in finance when we were in a crisis, no experience in medicine when reform of the system was a salient issue, no record of tough decisions made under pressure ...
Why are you now so shocked, SHOCKED! at his fumbling?
I wonder, did SEIU Marxists ask for a govt bailout and a 3.2 billion dollar tax rebate? i mean we KNOW that the unions control Obama and have over-sized influence on our political system. Surely this can be proven by looking at the results of their lobbying, right?
But hey, if union members make less, then there will be less tax revenue from them, and GE, LIMOMAN and JOMAN will willingly step up in an effort to share the sacrifice.
no, no, no...
Obama is "anti-business!"
Obama is a Marxist!
We KNOW this!
Same as we KNOW he is a foreigner and a closet Muslim. Good Golly, if ya don't beleive me tune in to Beck and co, he KNOWS all of this. Obamas anti-business agenda is well documented, what with is tax increases, stubborn refusal to help out corporations suffering from self inflicted wounds and his standing in the way of free trade agreements.
Oh, wait, the opposite is true.
Well, he is still anti-business, somehow, because if we say it enough it must be true.
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