Sunday, January 23, 2011

The GrEening of America

I'm a little disturbed by GE, which probably comes as no surprise.

My readers know I've had some ups and downs with General Electric. Fortunately, the majority of that animosity has been put to bed. My group owns two GE MRI's, and I work with several other GE machines. If I ever get funding for a SPECT/CT scanner, I will give the Discovery 670 proper consideration. I still am no fan of Centricity PACS, but we'll still let bygones be bygones.

So why am I troubled? Just in the past few days, President Obama announced that Jeff Immelt, CEO of GE, will lead the President's Council on Jobs and Competitiveness:
“Jeff Immelt’s experience at G.E. and his understanding of the vital role the private sector plays in creating jobs and making America competitive makes him up to the challenge of leading this new council.”

Well, that isn't bad, is it? Mr. Immelt replaces former Fed Chairman Paul Volker. As the head of a Really LarGE company, Mr. Immelt ought to have a very good idea of how the private sector works. No doubt he can help the country. But I'm still disturbed.

Why? Because GE and Mr. Immelt are a little too cozy with the Obama administration. This sort of thing is nothing new, as I'm sure my more liberal friends will point out that former Vice President Richard Cheney (Aunt Minnie censors the name Dick, and I've been conditioned to say Richard instead) was head of Halliburton. But read on and decide if perhaps the current situation is a little different.

It seems there are quite a few areas where GE has made some inroads into the way the country works. Let's start with the Green initiative (rather ironic that GE's main color is a rather bright shade of green.) Who makes a larGE percentage of green energy equipment? Ever hear about the GE line of windmills, solar panels, and so forth? There's a lot of money to be made out of thin air.

And lest we forget, those nasty energy-wasting incandescent bulbs, which were sold mainly by GE, are to be phased out starting next year. The replacements, including mercury-containing compact fluorescent bulbs (CFL's), are offered in wide variety, from...GE. Sorry, Kermit, it is quite easy to be Green, or at least sell Green, if the President pushes your products.

NBC, which is about to be spun off to Comcast but still under GE auspicies, has had a pretty big Green initiative with Green Week and Earth Week. And no one will doubt that MSNBC has been rather pro-Administration. We'll see how they behave once they are under different management. Fortunately Keith Olbermann managed to leave MSNBC all by himself.

GE has been front and center in the health care debate, and has a huge presence on the CCHIT and HITECH boards, as I have mentioned in the past. GE's own site lauds this, and well they should:
GE Healthcare has actively advocated on behalf of our customers and participated in the development of the final rule, and we look forward to working within the final guidelines to help ensure success for our customers...GE Healthcare’s Stimulus SimplicityTM program is designed to help hospitals and physician offices accelerate EMR adoption by taking advantage of zero percent financing with deferred payments from GE Capital along with a certification warranty for the EMR solutions from GE Healthcare. It addresses the current obstacles to EMR adoption of stimulus complexity, uncertainty around future standards and affordability.
And we all know who sells a LOT of imaging equipment. Clearly, support for the Health Care Abomination has the potential to be quite lucrative. Indeed, Ken Terry from noted in 2009:
General Electric’s announcement today that it will invest $6 billion in a worldwide “Healthymagination Initiative” raises familiar questions about the interplay of free enterprise and healthcare reform in the U.S. While some components of GE’s plan could help lower costs, raise quality, and increase access, as CEO Jeff Immelt contended in a press conference, the overall program seems designed to expand GE’s healthcare business and its profits. As Immelt put it candidly, “We don’t run a charity at GE. We’re in business to make money for our investors.”
But these piddly items are just the beginning. In 2009, Vanity Fair reported:
The issue at hand was this: Would Obama go against the signals he had put out earlier and dismantle the so-called Eastern European shield? By taking apart this defense system, he risked angering many of those who had voted for him, but he would please Putin. So what did Obama do? As the major news outlets reported at the time, he simply gave the go-ahead to have the shield dismantled. In exchange, according to Reuters, Putin agreed to meet with “several U.S. executives ... from firms including General Electric, Morgan Stanley, as well as TPG.” [Italics mine.] G.E. is supposed to bring good things to life; in this case, it powered Obama’s growing pragmatism.

In a similar development that proved greatly to the benefit of G.E., the Obama team apparently reversed course on another deal. For many months it sent out strong signals that it would not support a nearly $1 billion U.S. allocation that would allow the survival of a costly defense initiative called the Joint Strike Fighters engine program. Military buffs know that G.E. is teamed with the U.K.’s Rolls Royce in the development of this jet-engine project; so it should not come as a shocker that Obama last month quietly included the plan in the 2010 Defense Authorization Bill, which he signed with no apparent hesitation.

Making the G.E.-friendly developments more suspicious is the fact that Immelt was appointed to Obama’s Economic Recovery Board earlier this year. Soon afterward, The Washington Post reported that G.E. had become “the biggest beneficiary” of the federal bailout program. And Immelt was caught boasting, in a November 17, 2009, Wall Street Journal report, that he expected to gather in roughly $192 million for his struggling company in government-funded projects.

Chief among these, it now seems, is the coming Afghanistan surge. Available documents show that G.E. has made out quite nicely from the wars of recent years, gaining a $3 billion contract to provide power to the rebuilding of Iraq and a $5.9 million deal to provide power to air bases in Afghanistan.
To be fair, GE no longer does business with Iran:
GE doesn't do business in or with Iran. Due to the developing circumstances there, the concerns of our shareholders, and and our view of our corporate responsibilities, GE and its board decided in 2005 to stop doing business in Iran. There have been two exceptions to this: completing the work for existing contracts as quickly as possible and humanitarian activity, which is authorized by U.S. Government licenses. As of June 2008, we have completed all business in Iran. GE at all times acted in full compliance with U.S. and other laws. We have always required our businesses to follow U.S. sanctions and other applicable laws. In fact, our policies have been more restrictive than U.S. law.
Billy Hallowell of, notes the ultimate irony in all this:
The U.S. government has always been . . . a viable GE partner, but the changing political landscape is paving the way for the company to receive transformational benefits and control. Immelt realizes this, which is likely one reason that Obama was the top recipient of GE contributions during the 2008 presidential campaign (after all, Immelt is a Republican and a former McCain supporter who has no other reason apart from profits to partner with Obama). With such extensive reach into sectors that impact the daily lives of Americans and with international policy at stake, it is in the public’s best interest that close attention be paid to the alliance between GE and the Obama administration.
In the end, Fox News sums up the problem, the reason I'm disturbed by Mr. Immelt's recent appointment:
It is unclear how the administration plans to deal with the ethics challenges created by having a CEO whose income is determined by stock performance leading a panel designed to recommend government policies. G.E. (2009 revenue: $157 billion) is a huge government contractor and is always in the market for new subsidies and incentives.
Yes, I'm a Capitalist, and a GE stockholder, and I do applaud GE's increased profits. But, still, I'm disturbed. Is it OK to unlevel the playing field via governmental intervention? Is it right for a larGE company to influence the government at the highest levels for its own gain? Perhaps. But I'm still a bit disturbed by the whole thing. Perhaps I just don't have a healthy-enough imagination.


Jacques S said...

Very interesting and well written article Dalai. I too worry about large corporations that back politicians. Logic dictates that they do it because there will be some gain to them. I'm glad to see that this has not changed your use of GE products. I work on the safety side of medical training, and I have worked with some imaging centers regarding their policies and safety procedures. (My company even produced a MRI safety video with their help). Every one of them had some type of GE scanner. One facility has only GE imaging equipment, the manager swears by it.

zack said...

The fact that you are asking the question is evidence of how deep the misinformation campaign goes. We are living in a Fascist state this has become - fascism is the merger of state and industry, with a nationalistic bent (please don't lambast the term, I'm not saying we are Nazi's)

Make up your own mind
- this is a government that has "lent" or "printed" 10 trillion in support to almost every industry or foreign nation
- stimulus package after stimulus package involves printing dollars (from our future) to BUY toxic assets from BANKS into the FED Toxic Waste Dump. People buy, Banks dump. Many trillion, not $600 billion QE2 or $700 TARP.
- Because of the govt's largesse crises will be whipped up and austerity will reign on the people. Expect Medicare and Social Security "entitlements" to be chopped. People paid in, won't get anything out.
- Corporations like GE were given $300 Billion loans in 2008/2009. You won't see GE media pieces saying anything about that? GE like the mega-banks was a financial terrorist.
- The lender of last resort for mortgages is now the govt. Private industry won't touch it. The Fed is the world's largest landlord in history, they've had roach motels across the US dumped on them, to most of the US housing stock.

The very idea that they "saved the US economy" is a fiction based on fear. It is 100% a theft, and the only reason we aren't up in arms is because the printing "feels good" for the moment.

Take note of leaders in many 3rd world countries, flying away with the gold and inflation raging. A hint.

Anonymous said...

The playing field is way skewed. Whether or not you are a fan of IBM, Sam Palmisano's overtures to the White House have been rebuffed in favor of GE. Perhaps that tide will turn with the emergence of the Dr. Watson Project at Cornell. It is bad but unfortunately traditional in this country for any single corporation to have the Executive access that GE commands.