The American Spectator

Eminentoes

Three Little Piggies

By Abu M. Friedman from the September 2009 issue

OINK, SAYS JEFF IMMELT, SMACKING HIS LIPS. While his company's stock has shed two-thirds of its value over the last year and a half, GE's chief is looking heavier than ever. Burying one's nose in the public trough can do that to a man.

Oink, oink, says Wal-Mart's Mike Duke, signaling his support of the government's health care plans. His company is actually doing rather well. He is keen to take advantage of a situation that would allow super-sized Wal-Mart to gain market share at the expense of smaller and more entrepreneurial rivals.

Oink, oink, oink, says JP Morgan Chase's Jamie Dimon, grunting happily on the front page of the Sunday New York Times. Dimon basks in the glow of White House adulation. The former Wall Street wonder boy has become his industry's ambassador to the court of King Barack. The king has rewarded his fealty by patting him on the head and calling him "Jamie"-which is the cute and affectionate handle that his mom bestowed upon him when he was a little baby. Even then, his soft, moist eyes had a special pleading quality that set him apart from his littermates.

It is sad to see, and hear, so many prominent CEOs going out of their way to curry favor with the government-a government that is madly determined to mismanage the economy and to bend private enterprise to its will in the pursuit of social objectives.

In a speech to the Detroit Economic Club on June 26, Immelt announced the opening of an "Advanced Manufacturing and Software Technology Center" just outside Detroit, which is of course home to Government Motors and the UAW. He gushed about how "We should welcome the government as a catalyst for leadership and change," saying, "There's a long history in this country of government spending that prepares the way for new industries that thrive for generations....Think of the NIH or NASA and all of the new innovations that came out of those programs-from computing to communications to health care. America has that kind of chance with unprecedented levels of new government investment."

Right on, Mr. CEO. Hooray for unprecedented levels of wasteful public spending that threaten to bankrupt the economy and will certainly result in raising taxes on individuals and businesses alike.

In another part of his speech, Immelt, or "Jeffkins," as the king calls him, spoke of how GE's new technology center "will develop technologies that can change peoples' lives-clean energy, better transportation, affordable health care." Will Immelt be using TARP (Troubled Asset Relief Program) money to finance this wonderful investment? Since late last year, GE Credit has raised billions in long-term debt with the help of federal loan guarantees. Without these guarantees, GE's stock would no doubt be even deeper in the toilet. According to some analysts, GE would be in the same approximate position as the CIT Group.

In his latest announcement of dismal quarterly earnings, Jeffkins pointed to an emerging bright spot in the nation's economy: stimulus spending. GE expects to get as much as $200 billion in stimulus money targeted for clean energy and health care. A friend of mine who quit GE years ago to set up his own business, which has become the world leader in supplying low-cost carbon fibers used in making the world's most advanced wind turbines (a part of the market in which GE is a non-player), expects the slow-moving and bureaucratic GE to do an excellent job of winning government grants-and an equally exemplary job of wasting every cent that the government gives it.

A FEW MONTHS AGO, Wal-Mart's Duke sent a letter to the White House announcing his support for proposed new legislation requiring all but the smallest employers to provide health insurance for their employees. This left the National Retail Federation, the industry's main lobby, feeling "flabbergasted." One of its spokesmen said that a blanket mandate would be "the single most destructive thing you could do to the health care system shy of a single-payer system."

But was Wal-Mart's move really all that surprising? As the Wall Street Journal reported on July 16, "In the past four years, Wal-Mart Stores has undergone a stunning metamorphosis-from whipping boy to the political left to corporate leviathan now welcomed with open arms by a Democratic White House."

The metamorphosis began when Lee Scott, Duke's predecessor as CEO, hired Edelman PR executive and longtime Democratic political operative Leslie Dach to head corporate communication. Over the past several years, the company has spent millions to broadcast its tender and heartfelt concern for the environment.

Just the other day, the company announced that it will tell suppliers they must calculate and report the full environmental impact involved in making their products, and be prepared to submit to a rating system that Wal-Mart will devise and disseminate alongside prices for everything from clothes to electronics. Imagine that! Wal-Mart, as the nation's largest employer and retailer, now stands ready to act as a kind of global Environmental Protection Agency, policing its suppliers. This should put them in good stead with the likes of Al Gore, but it also means that that the company is prepared to sacrifice the customer's desire for the lowest price on the altar of environmental activism. That will be the inevitable result of forcing suppliers to spend more on living up to tougher standards and conforming to a more demanding and bureaucratic purchasing department inside Wal-Mart. The increased costs will be passed along to Wal-Mart shoppers.

AND THEN THERE IS DOE-EYED Jamie Dimon, whom the New York Times describes as "President Obama's favorite banker." The New York Times, which happens to be the president's favorite paper, got the scoop on how JP Morgan Chase is holding a meeting of its board for the first time in the nation's capital with a very special guest speaker: White House chief of staff Rahm Emanuel. The paper noted that Treasury Secretary Tim Geithner had declined an invitation to join the party "out of concern that he would be seen as too cozy with a company that has numerous business issues before the department." Silly Tim! Bad Tim! This is a playground where everyone is supposed to share their toys.

Jamie understands that. He is one of those visionaries with the uncanny ability to read the writing on the wall. According to Obama's favorite newspaper, in 2007 Jamie "assessed his own performance for his board and gave himself a ‘D' for effort in Washington. He subsequently revamped the firm's government affairs office, mindful of Democrats' ascendance." He now calls government relations the firm's "seventh line of business." But wouldn't it make better sense to think of it as a "third rail"-one that doesn't kill outright but does the next worst thing: reducing those who touch it to a zombie or vegetative state? However, if one of Jamie's trusty lieutenants dared to suggest any such free market heresy, that person would be fired on the spot.

For Jamie Dimon and JP Morgan, the government relations business involves a good deal more than boring old banking. It means constant trips between New York and Washington, D.C. It means constant banter-via phone and e-mail-with his pal Rahm Emanuel (whom he tried to hire back when he was second in command at Citigroup). One gets a sense of the extraordinary chumminess and simplemindedness of this dialogue from this exchange included in the front page story in the president's house organ:

Letter to the Editor

topics:
Wal-Mart, Crony Capitalism