Skip to comments.General Electric’s Jeffrey Immelt: Looter or Producer?
Posted on 03/25/2011 11:30:41 AM PDT by radioone
Ayn Rand did not sell almost 7 million copies of Atlas Shrugged by creating ambiguous characters. Rands world is neatly divided between the heroic producers (like steel magnate Henry Rearden) and the dastardly looters (like lobbyist Wesley Mouch). Further simplifying things, the good guys are all stunningly gorgeous captains of industry (Grant Bowler as Rearden pictured) while the conniving politicians are all a bit frumpier (Michael Lerner as Mouch pictured).
Unfortunately, the real world is a bit more complicated. The line between productive capitalist and looting collectivist is a lot less stark. And often the sleaziest public servants are quite handsome (John Edwards not pictured). Which brings us to todays New York Times story on General Electrics tax strategy and GE CEO Jeffrey Immelt. The NYT reports:
General Electric, the nations largest corporation, had a very good year in 2010. The company reported worldwide profits of $14.2 billion, and said $5.1 billion of the total came from its operations in the United States. Its American tax bill? None. In fact, G.E. claimed a tax benefit of $3.2 billion.
And 2010 was no anomaly. The Times goes on to report that over the past five years, GE has accumulated $26 billion in American profits while receiving a net benefit of $4.1 billion from the IRS. This is no accident. As The Washington Examiners Tim Carney has reported, days after President Barack Obamas inauguration, Immelt wrote to GE shareholders:
[W]e are going through more than a cycle. 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.
President Obama solidified this partnership in January when he named Immelt chairman of the Presidents Council on Jobs and Competitiveness. But this placement did not come cheap. The Times notes that GE has spent more than $200 million on lobbying over the last decade. And that is just the political spending that GE is willing to label as lobbying. There are plenty of other unaccounted-for kickbacks to politicians as well. Consider this nugget also from NYT:
The shelters are so crucial to G.E.s bottom line that when Congress threatened to let the most lucrative one expire in 2008, the company came out in full force. G.E. officials worked with dozens of financial companies to send letters to Congress and hired a bevy of outside lobbyists.
The head of its tax team, Mr. Samuels, met with Representative Charles B. Rangel, then chairman of the Ways and Means Committee, which would decide the fate of the tax break. As he sat with the committees staff members outside Mr. Rangels office, Mr. Samuels dropped to his knee and pretended to beg for the provision to be extended a flourish made in jest, he said through a spokeswoman.
That day, Mr. Rangel reversed his opposition to the tax break, according to other Democrats on the committee.
The following month, Mr. Rangel and Mr. Immelt stood together at St. Nicholas Park in Harlem as G.E. announced that its foundation had awarded $30 million to New York City schools, including $11 million to benefit various schools in Mr. Rangels district.
Were sure there was no quid pro quo between Rangel and Immelt. That would be bribery, which is illegal. And there is nothing illegal about lobbying or giving to charity. In fact, in our current system, it is hard for a capitalist to compete without investing in politics. The U.S. corporate tax rate is the highest in the world at 35 percent. If GE did not have a Washington office dedicated to lobbying for benefits from the government, over the last five years it would have had to pay somewhere around $9.1 billion in taxes on its $26 billion in American profits alone. Instead it got a $4.1 billion benefit. That is a $13.2 billion payoff on a $200 million lobbying investment. What kind of capitalist could say no to that kind of return on investment?
When once-great exemplars of capitalism like GE are profiting more by investing in lawyers and lobbyists in Washington instead of engineers and innovators, our system is clearly broken. We can start to fix these incentives by reducing the corporate tax rate. But much broader reform of our tax and regulatory system is needed.
“In a reset economy, the government will be a regulator; and also an industry policy champion, a financier, and a key partner.”
Sounds like a succinct definition of Facism.
Yep, and IIRC, they got TARP $ ,too.
Also buying 25,000 Chevy Volts to be tested on their GE plug in stations....probably making it a total write off.
I just finished reading the book. He’s a looter.
But at least we will all have snappy brown or black shirts and our high speed electric trains will run on time in the "reset" economy.
“But at least we will all have snappy brown or black shirts and our high speed electric trains will run on time in the “reset” economy”
Ein Volk, ein Reich, ein Obama!
He is a POS. Obama backstopped ALL of GE’s worthless debt with the US Treasury over a year ago. If they had lost their phony AAA debt rating - GE would have gone bankrupt. True. There would have been a credit default swap frenzy on GE. Scum company.
I bet those crappy union controlled trains will run just like....Amtrak.
It is just like 1930s fascism. Build useless trains that no one wants run by union thugs. Slush fund.
The proper word for Immelt is PARASITE.
GE is corporate welfare at it’s finest.
Did anyone know their releasing a movie for Atlas Shrugged? It comes out in mid April.
GE has become part of the government, like GM.
Taxes are for little people like you and for companies Obama doesn’t like
The taxpayers are subsidizing GE.
GE has accumulated $26 billion in American profits while receiving a net benefit of $4.1 billion from the IRS.
Y’all know that this nation is the most corrupt democracy on planet earth. I know, we are a republic but we act like a democracy.
There’s a damned good reason I deliberately avoid any GE products these days. They are probably the worst example of rest seekers in this country.
He is no Jack Welch.
Most of our largest corporations are no longer capitalist entities - they operate as arms of government in return for various market preferences. It didn’t matter so much as long as the playing field remained open to smaller companies, which used to be able to easily outmaneuver them in every area except price. But with the Obamoids’ pathological hatred for small business, the landscape is rapidly changing. Who needs the trouble of implementing Soviet-style Communism when you can just force everyone become a unionized GM or GE employee? They are much easier to control when they still think they are free.
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