Does GE Bring Hypocrisy to You?

Back in January 2011, President Obama established a Presidential Council on Jobs and Competitiveness. The President appointed the CEO of General Electric, Jeff Immelt to chair the council.

Within a few days there were complaints about whether GE is even a 'good citizen' and pays a fair amount of taxes. Also, there was concern as to whether Mr. Immelt has a conflict of interest in serving on this council.

However, for the sake of an evaluation of hypocrisy, I'm going to focus on the issue of jobs.

On July 11, 2011 at a 'jobs summit' conference, one of the speakers (a headline speaker) was Mr. Immelt. The CNN report of this is entitled,

"Immelt: Businesses must do more on jobs."

A few days later, GE announced it was moving its X-ray business to China.

Is this a case of hypocrisy.

I think not. At least not on the basis of this one story.

GE is an enormous company with dozens (or maybe hundreds) of subsidiary operations. It might be hiring in some parts of the company while cutting jobs in other operations (GE actually stated that moving the X-ray biz to China would not result in job cutbacks). Furthermore, GE might be increasing employment in some months (or years) and decreasing them in others. In addition, it is hard to 'count' jobs by a single employer. For example, what if GE cut 50 jobs and then hired on a contractor who in turn hired those same 50 people to do their old job. That would result in a decrease in GE jobs but not in all jobs.


The Whitehouse.gov announcement of the appointment of Immelt is here.

With respect to the conflict of interest issue, see here.

With respect to the taxation issue see here and here and here.

July 11 CNN report is here.

July 26 report of GE moving X-ray business to China is here.

Obama and Corporate Jets

In a June 30, 2011 press conference (actually much of the conference is the President's opening remarks but that is typical for press conferences for all Presidents), President Obama mentioned the tax break for corporate jets a half dozen times. He noted that it is a tax expenditure and challenged the Republicans to repeal it.

The tax expenditure (which allows depreciation in 5 years instead of 7 years) was in the stimulus bill the President signed.

In addition, the day before this press conference, Obama visited an Alcoa Plant in Iowa where aircraft components are made. Most of the work there is done for large jets but some is also done for small jets (e.g., Gulfstream).

Does this make Obama a hypocrite?

Probably not in my opinion.

The stimulus bill was passed with very little apparent Administration input (no administration bill was ever developed). It is even possible that the President was never briefed on the corporate jet aspect of the bill or that such a briefing was very short. As a side note, almost every important bill in the 111th Congress (e.g., the stimulus, the health care act, the financial reform act) happened without much apparent Administration input.


Transcript of the June 30 press conference is here.
Article from 2009 spotting the corporate tax break in the stimulus bill is here.
Alcoa's PR on the Obama visit is here.
A post from Powerline calling Obama a hypocrite on this is here.