GE got caught with its pants down. It over leveraged itself like much of Wall Street before the 2008 Crash and then begged Hank Paulson in Bush’s Treasury to save the company from its bad bets. Which Paulson did – or rather WE did. Now, fully indemnified and then some, GE is getting rid of its financial division. Exiting the scene free and clear. No problem. No pain. Everything’s fine. No Thank You to the taxpayers.
In many ways actually.
Free enterprise. Not crony capitalism.
As anyone who reads us regularly knows we are fans of letting people and businesses keep as much of their own money as possible. At least tax breaks don’t cost the taxpayer anything and if the (tax break) money is kept in the private sector that money is much more likely to be used efficiently. (Of course the Fed has deeply undermined this mechanism with QE and near 0% rates.) However, as we also say, tax breaks can still be a form of crony capitalism. If company X gets a break and company Y does not because company Y doesn’t have the right connections, this is still a politicized marketplace and distorts the economy.
C.J. Prince, the author of this article does an excellent job of examining crony capitalism and the associated dangers to the economy. Crony capitalism does indeed hurt us all. Even Boeing and GE will likely be hurt in the long run. If the USA becomes a truly cronyist economy growth will limp along (if we are lucky), dynamism within the economy will suffer from lack of oxygen, wealth will slowly erode away from the middle class, and we will wake up one day and find ourselves outclassed by freer economies in other parts of the world.
The American Dream is being chased out of America by the cronies.
If there are 2 guys who know about and have benefited from crony capitalism Bill Clinton and GE CEO Jeffery Immelt are those guys. They are political business people. They are fully on board with the corporate state. They believe that government and business should partner. They see no problem with crony capitalism. The stronger the partnership between government and business the better because that means more risk is underwritten by the US taxpayer while the crony class gets to reap the profits. So what if the money which goes to finance GE in Africa comes from everyday people who are sick of paying for corporations which in some years don’t pay a dime in federal taxes? So what? This is business Clinton and Immelt remind us. You, the peons just don’t get it. Just shut up and give GE and Boeing your money you serfs, you tax and debt slaves. Know your place. How dare you question the Export-Import Bank of the United States. How dare you.
I am sorry progressives but this woman is out to lunch. She’s the same old same old. She does the whole doe eyed earnest thing very well, but when it comes down to it she appears to be yet another old school corporatist.
I liked GE so much better when all I thought they made was light bulbs.
This is nothing new. They’ve long been partners. From GM to Goldman Sachs, from GE to Monsanto, this administration has sought to “partner” with business since the beginning.
“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.” – Jeffrey Immelt, CEO of General Electric
From the first days of this site we have chronicled GE’s mastery of the crony capitalist system. The company is extremely good at leveraging its size and political connections. Arguably there’s no company that works the system better.
The environment is very important to us at Against Crony Capitalism. We believe in a cleaner planet, we are fans of trees, we like vast expanses of rain forest, we like environmentally friendly materials and energy. But in order for something to be considered truly sustainable it must be sustainable economically. Does the market want a material or form of energy at a cost which makes sense? If the answer is no, if a project is not economically sustainable, it should not be done. Pouring mounds of taxpayer dollars (which are taken from the productive part of the economy) into untested technologies and markets created by government fiat is just poor stewardship. It’s a bad use of money.
This guy is something else. Take a look at the above picture taken when business leaders reported to the White House in the wake of Obama’s victory. Look at Obama’s face.
In the wake of the president’s triumph, the crony capitalists knew they had to come and kiss the ring. Today they did that.