Posted on 08/29/2009 6:02:43 AM PDT by Kaslin
The politics of business is getting perilous for CEOs trying to traverse the ideological battle between capitalism and socialism.
Whole Foods CEO John Mackey is under fire for offering free-market solutions to health care while GE CEO Jeff Immelt is benefiting from adopting a strategy in which the government is his partner.
Indeed, the contrasting approaches to Obama’s political agenda offered by Mackey and Immelt illustrate the risks and benefits of dealing with the president’s statist policies.
Whole Foods – the organic grocery retailer – is in the midst of a public relations crisis stemming from a commentary on health care reform by Mackey.
In his strongly worded opinion piece, “The Whole Foods Alternative to ObamaCare,” published in the Wall Street Journal, Mackey rejects Obama’s proposal because it would result in “a massive new health-care entitlement that will create hundreds of billions of dollars of new unfunded deficits and move us much closer to a government takeover of our health-care system.”
As an alternative, Mackey recommends a series of free-market ideas, including high-deductible health insurance plans and health savings accounts (HSAs), which his company has adopted.
Mackey also seeks to reduce health care demand by encouraging personal responsibility, “with the realization that every American adult is responsible for his or her own health.”
Mackey’s push for personal responsibility and a free-market solution is not an altruist endeavor, but good business. Mackey built Whole Foods by capitalizing on consumers seeking healthier food, and now he senses another opportunity: in this case, the opportunity to profit from selling foods that help combat obesity and chronic diseases.
Prior to the publication of his commentary, Mackey told the Wall Street Journal he wants the company “to encourage customers and employees to attack the nation's obesity rate, the prevalence of heart disease, diabetes and cancer.”
He envisions meeting that goal by increasing his company’s offering of healthy foods and to educate consumers on having better diets by initiating a Healthy Eating Education program in his stores.
Obviously, this business model could prosper under policies that encourage individual incentives to improve diets.
Mackey’s views spurred outrage among Obama’s left-wing supporters. A Facebook group dedicated to boycotting Whole Foods was created in record time, numerous blogs railed against Mackey and there were protests outside stores in several locations.
With Mackey on the ropes, a union pension fund advocacy group is calling for Whole Foods’ board of directors to dismiss him from the company he founded.
Although Mackey is far from a right-winger, his free-market view of health care and labor made him a target of Obama’s supporters.
In contrast, GE’s Immelt is “all in” with Obama’s policy agenda and it’s paying off handsomely.
Immelt embraces the notion of a new era of capitalism where companies coordinate their efforts with the government. In a speech to the Detroit Economic Club in June, Immelt said, “We should welcome the government as a catalyst for leadership and change.” He added, “America should get busy addressing the two biggest global challenges – clean energy and affordable health care.”
Immelt is doing more than echoing Obama’s campaign rhetoric of “change”: He has GE actively advancing the president’s policies, especially cap-and-trade.
Through its participation in the United States Climate Action Partnership – a cap-and-trade lobbying group – GE helped push the Waxman-Markey bill over the goal line in the House of Representatives. In doing so, the company was able to load the bill with provisions that will boost GE’s sales in “clean energy” products.
Even more disturbing, if true, GE’s support of Obama may have positively influenced the terms of a settlement with the Securities and Exchange Commission (SEC) over allegations the company was “cooking the books” to meet quarterly earnings expectations.
For a mere $50 million, GE settled four instances of accounting irregularities including engineering fake sales of locomotives to accelerate end-of-year earnings.
Following Enron, Sarbanes-Oxley and concerns of Wall Street greed, it’s amazing that GE escaped stiffer penalties from the SEC and show trial inquiries from the anti-business Congress.
But then again, Immelt is on Obama’s Economic Recovery Advisory Board and the last thing the president needs is to draw public attention to the possibility that a Bernie Madoff-type CEO serves as a presidential adviser.
Unfortunately, it appears that CEOs whose business strategies are in sync with Obama’s calls for greater government control will be rewarded while those who confront Obama’s plans for America will be punished.
This observation may explain why drug companies are lining up to cut a deal with Obama on health care and energy and utility companies are cutting deals with Congress on cap-and-trade.
Because of the critical role corporations play in public policy, liberty-minded citizens need to be willing to engage CEOs as they do elected officials. Participation at shareholder meetings and tea party rallies at corporate headquarters should be on the agenda.
Otherwise, business leaders will take the path of least resistance. They will join Obama and selling all of us out.
Just like Mugabee’s “War Veterans”, this is a tactic straight out of darkest Africa.
We are going to really get tired of Acorn (or whatever they are calling themselves now) and the Union Thugs who have been coming to the Townhall Meetings.
I have already had my fill of Obamabots here on the web.
Jeff Immelt has proven himself to be a coward and a sell-out. He has to know that all of this global warming stuff is nonsense, that cap-and-tax is going to make this country much weaker, etc. etc., but he also knows that GE can prosper in such a controlled economy, statist “capitalism”.
Unfortunately, he and GE will probably be rewarded for all of this — they already have been as the article states regarding the cooking the books report. Shaking my head for our country and formerly capitalistic system.
This is a textbook example of Fascism.
Fascism is based on forcing or enticing big business/industry to join in with government in controlling the masses.
GE has been enticed.
Whole Foods will be forced.
Other CEO’s are watching and trying to calculate their options.
And the rest of us get left out.
2010 is the deadline for us. Either we do the right thing on election day or we become another Venezuela.
Protect your privacy. Replace Google with IXQUICK at www.ixquick.com.
If we do not wish to lose our freedom, we must learn to tolerate our
neighbor's right to freedom even though he might express that freedom
in a manner we consider to be eccentric.
Just like I.G. Farben of Germany in the '30's.
Contrasting these two companies makes an excellent point.
Another interesting thing is how unrelated the interests of a government-dominated company are to the country’s real interests. GE, for example, is part of the government’s war on incandescent lightbulbs and has started shutting down its plants...and moving the jobs to China, where GE plants manufacture those fluorescent things.
Whole Foods, on the other hand, employs people, buys lots of local and small company products, and does economically productive things by encouraging the development of the “environmentally friendly” materials with which it builds its stores, not to mention the employment it gives to local firms in the installation of these materials.
Glad somebody covering this story.
The left always hijacks capital.
I absolutely refuse to buy any GE products
My response has ben pretty simple: sold my GE stock and returned to Whole Foods.
What is Google?
One of the trends over the last 50 years are multi-national corporations. What maximizes profit does not necessarily dovetail with America's well being. Business will buy into the model that best promotes the bottom line, sovereign and citizens interests being damned. Obama and his minions are just hasting the process.
April 21, 2009
My Dear Mr. Immelt,
My late father worked for GE for many years in the Apparatus Service Division out of Cleveland, Ohio (specialized in marine work) and was always proud of his relationship with a grand old American enterprise. You were growing up down there in Cinci at the time and, one could assume, were inculcated with those same traditional values my father developed growing up in Coshocton, Ohio.
My wife and I are long-time GE shareholders and have remained thus through the current tumultuous period.
But we have become concerned, indeed ALARMED, at recent events at GE, the most telling of which is your evident embrace of a man who is clearly hell bent on dragging America into some sort of fascist or socialist nightmare. And make no mistake — that is PRECISELY where he is headed.
My wife and I have both signed the “We Surround You” letter at the Free Enterpriser web site so I shant belabor the points already made therein.
I served in the USAF for four years between ‘62 and ‘66. One day in May of ‘62, I raised my hand and swore an oath to God to “...defend the Constitution of the United States.”
To the best of my knowledge, that oath had no expiration date and is still active.
I would respectfully ask you to reconsider your recent activities vis-a-vis what many out here in fly-over country consider to be aiding and abetting an enemy of that Constitution and the IDEA of America envisioned by the Founding Fathers.
If you do nothing else, pray about that and think about what your continued course of action portends for your kids, your grandkids and, more importantly to me, mine.
High deductable plans plus health savings accounts, which has been proposed many times, are excellent ideas.
Another idea I like is that people caould purchase additional amounts of insurance, sky’s the limit, out of their own pocket. Private insurance companies are the obvious ones to provide those plans.
A public option doesn’t bother me if the coverage, and thus cost, is sufficiently limited. The public option should be so limited that practically everyone would buy some amount of additional coverage.
Not everyone can afford high deductible plans. That does not mean they should not be deductable. ( perhaps I misunderstood you) I totally agree with you that the health savings plan are an excellent idea.
The stock market strongly disagrees.
Yes, precisely. Here in California, most of the people I know agree with me on economic policy issues, but vote Democrat because they're socially liberal.
So the only choices we have are a) full blown socialism coupled with full blown socio-cultural liberalism (viciously enforced by the State,) or b) free-market capitalism coupled with socio-cultural neutrality. Those are the only viable alternatives. Choose one. Choose wisely.
Indeed. Use Bing.
GE’s product quality and service have been going downhill for a long time. After a couple of lemons (dishwasher, phone), we stopped buying anything from them.
As soon as we found out that Whole Foods’s John Mackey stood up to zer0, we drove the 70 miles to the nearest one and blew our budget buying stuff there. I wish that they were closer. I discard half the produce I buy at Wal*Mart because I discover that it’s rotten when go to prepare it, but we got some lovely fresh fruit and veggies at Whole Foods. It’s no more expensive because I throw none of it away. Well, except for the $16.00 expense of the gas... Sigh, I really, really wish that they were closer.
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