Front page article in the Wall Street Journal today entitled "General Electric Pursues Pot of Government Stimulus Gold." Tells how it is the declared strategy of GE CEO Jeffrey Immelt to go after government money to make his company profitable. Immelt, a registered Republican who supported John McCain declares:
"We're all Democrats now."
And why not? GE hopes to reap billions from government largess:
GE has high hopes for the strategy. It says that over the next three years or so it could bring in as much as $192 billion from projects funded by governments around the globe, such as electric-grid modernization, renewable-energy generation and health-care technology upgrades.
The company is just starting to see a payoff. Last month, for example, President Barack Obama announced $3.4 billion in government-stimulus grants for power-grid projects. About one-third of the recipients are GE customers. GE expects them to use a good chunk of that money to buy its equipment.
Now you can't fault Mr. Immelt (much) because he has a duty to his stockholders to maximize value. The problem here is government money (read: taxpayer dollars) being spent on things it was never constitutionally allowed to be spent on.
But we are entering a dangerous time when government connections determine market-place winners and losers, not the market. GE and Mr. Immelt are just early to the party:
By January, Mr. Immelt had become a leading corporate voice in favor of the $787 billion stimulus bill, supporting it in op-ed pieces and speeches. Reporters who called the Obama administration for information on renewable-energy provisions in the legislation were directed to GE.
As the bill worked its way through Congress, GE lobbyists pressed for grants, tax cuts or rebates aimed at businesses GE is engaged in, including provisions worth more than $80 billion for energy projects, appliances, health-care information systems and wind farms.
But what about businesses that can't afford expensive lobbyists to sway Congress on their behalf? Guess they get left out of the pot of gold at the end of the government debt rainbow.
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