Published January 21, 2011
Jeffrey Immelt's appointment to the Economic Recovery Advisory Board doesn't signal any change in direction for the White House. Why? Because GE CEO Immelt has been on board with Team Obama and its big government agenda all along. Indeed, the appointment is the latest evidence that Obama's charm offensive with the business community is simply political window-dressing. It's designed to distract the American public from an extreme regulatory agenda that moves forward unabated.
Consider Immelt's infamous 2008 letter to General Electric shareholders, in which he wrote:
"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."
General Electric would then take taxpayers for a remarkable free-ride indeed, becoming effectively the largest bailout recipient other than AIG by exploiting a loophole in a program called the Temporary Liquidity Guarantee Program. The Washington Post reported on how GE got the eligibility rules changed for the program, to become its largest recipient and wrap a taxpayer guarantee around all of its debt obligations throughout the financial crisis -- giving it a significant financing advantage not enjoyed by its competitors. Immelt praised the program for being "powerful and helpful" to GE.
By joining up with the Obama administration as a "key partner," GE also signed up for a joint venture called “cap-and-trade” -- an effort to impose the largest tax hike in American history on energy, causing prices to skyrocket for us while GE raked in profits.
In 2008, while GE stock was losing more than half its value, the company spent upwards of $18 million on federal lobbying -- the majority of it pushing for cap-and-trade. GE had positioned itself to make a fortune on a cap-and-trade scheme, rebooting its failed financial derivatives business for every aspect of carbon trading that the Wall Street wizards can dream up.
Now the EPA is considering adopting a cap-and-trade system while completely skipping Congress -- a genuine constitutional atrocity, but one that would line GE's pockets and that Immelt may be well-positioned to promote from his new position.
Given the serious economic challenges the U.S. economy still faces -- most significantly the desperate need for more job creation -- the Obama administration needs to make real policy changes that will encourage capital formation, investment, and job creation. Appointing a big-government cheerleader like Immelt as an adviser signals the opposite -- more of the same failed policies of government intervention.
Phil Kerpen is vice president for policy at Americans for Prosperity.