Yes, GE Is Destroying The Moral Fabric of America


During Senator Sander’s interview for the Daily News he was asked an interesting question:

“Would you name, say, three American corporate giants that are destroying the national fabric?”

He mentioned three that I think few people with access to information about these companies would dispute: JPMorgan Chase, Goldman Sachs and General Electric.  He targeted the first two in particular for their reaching of settlements with the US government, which is an implicit admission of being involved in illegal activities contributing to the most recent financial crisis.  The third was mentioned for two main reasons:

  1. Their shutting down of many plants in the US in favor of sending jobs to lower wage countries.
  2. The fact that they have been paying effectively less than 0% in income taxes by stashing $100s of Millions in offshore tax havens

Sanders went on to say that the reason these corporations and their activities are destroying the fabric of America is because when they are willing conduct illegal operations as part of their business, pay foreign workers pennies a day and prevent their fair share of profits from being reinvested into the American people, they are setting examples of greed and deceit, not fairness and compassion.

Of these three companies, one CEO (and former director of the New York Federal Reserve) took such offense to the accusation that he went so far as to post a 640 word response for The Washington Post.  That person was Jeffrey R. Immelt of General Electric.

In his article, he claims that he and others at GE take risks, invest, innovate and produce in ways that help sustain 125,000 U.S. jobs.  He continues to throw numbers out such as the “$40 million worth of business GE does with dozens of suppliers across Vermont”.  He then sites the reason that GE has “a presence” in other areas of the world is because they have customers in more than 180 countries and that not having a presence there would cause them to lose many of those customers.  He finalizes his response by accusing Senator Sanders of making “hollow campaign promises and taking cheap shots in speeches” followed up with his audacious concluding statement that Sen. Sanders is “missing the point.”

Clearly it is Jeffrey R. Immelt that is missing the point of Sander’s remarks.

Not once in his response did Immelt address the fact that his company is closing plants and sending jobs to China, Mexico, India and other low-wage nations in pursuit of higher profits for his corporation.  At an investors meeting in 2002 he did however say:

“When I am talking to GE managers, I talk China, China, China, China, China. You need to be there. You need to change the way people talk about it and how they get there. I am a nut on China. Outsourcing from China is going to grow to $5 billion. We are building a tech center in China. Every discussion today has to center on China. The cost basis is extremely attractive. You can take an 18 cubic foot refrigerator, make it in China, land it in the United States, and land it for less than we can make an 18 cubic foot refrigerator today, ourselves.”

Also, not once did Immelt’s response address the fact that from 2008 to 2013, while GE made over $33.9 billion in United States profits, it received a total tax refund of more than $2.9 billion from the Internal Revenue Service which was an effective rate of -9 percent.

Furthermore, he failed to mention that the $16 billion in financial assistance the Federal Reserve provided GE via US taxpayer dollars during the financial crises (while Immelt was director of the NY Fed branch) may have something to do with his company’s current ability to “take risks, invest, innovate and produce” anything.  Must be nice to give yourself a bail out with a pool of money your company didn’t contribute to.

 

Featured Image by: Forbes.com

I'm an Independent who loves to do research and analyze numbers. I try to take a fact based approach to forming my opinions and share them with a diverse group to get the best range of feedback. I agree strongly with Thomas Jefferson in that "An educated citizenry is a vital requisite for our survival as a free people." My goal is to learn as much as I can and inspire others to learn more as well.