Dr. J. has received a missive regarding his recent screed from Gormogon Agent KH who sent a coded message while on assignment in Shangri-La, Nepal:
Good afternoon, Doctor,
I think what Mr. Immelt means by out-of-date regulation is “regulation that doesn’t confer the entry barriers against smaller competitors they once did.”
Right you are KH!
The problem with big business is when they rely on the government for continued success. The Bailout of GM and Chrysler are prime examples of this. In an ideal universe, they should have been permitted to sell off losing branches and re-organize under current bankruptcy laws than enjoy the rescuing that they did. The major reason this was done was as a handout to the UAW who profited mightily by its holdings being moved to the front of the line alongside banks during the reorganization.
Bill Gates probably would have difficulty starting Microsoft out of his garage in the current regulatory climate.
Indeed, GE has done as well as it has of late, not because of innovation, or because they build a better mousetrap, but because they are in bed with Washington. Indeed, Immelt is both the CEO of GE and the chairman of the Council on Jobs and Competetiveness. Like all Team Obama titles, this Council probably works in a manner opposite its title (he’s probably the small business oppression Czar or such).
The moral of the story is that the economy would be better served if Washington got out of the business of picking winners and losers. That way, innovation can bring a company with a novel product to the heights of success (Apple) and a monolithic leviathan with a lousy product (any vehicle made by Chrysler) gets propped up because of its lobbying efforts. GE spent $238 million from ~1999-2011 but $0 in taxes last year. It’s ‘taxes’ so to speak go to the campaign coffers rather than to the treasury, and therein lies the problems. (Not that Dr. J. is a fan of corporate income tax, but you get the point).
Thank you for your missive, and let me know when you obtain the Amulet of Lo-Tsen.