When any kind of shift in a government happens, there will be people and companies who scramble to be part of the new groove and hop on the gravy train. GE is one such company. I expect to see Oracle and Caterpillar to show their tickets to the ride soon.
The separation of state and private enterprise ended in 1913 when the Federal Reserve was born to tell the government what would be what. In a stunning turn of events, Barack Obama’s takeover of the banks, car companies, and financial institutions in 2009 flips that power struggle over to the government’s side and it is making people even more uneasy than allowing corporate lobbyists to run Washington DC for some 100 years.
Yesterday, I ran across an interesting assessment of what fascism actually is:
As an economic system, fascism is socialism with a capitalist veneer.
Where socialism sought totalitarian control of a society’s economic processes through direct state operation of the means of production, fascism sought that control indirectly, through domination of nominally private owners. Where socialism nationalized property explicitly, fascism did so implicitly, by requiring owners to use their property in the “national interest”—that is, as the autocratic authority conceived it. (Nevertheless, a few industries were operated by the state.) Where socialism abolished all market relations outright, fascism left the appearance of market relations while planning all economic activities. Where socialism abolished money and prices, fascism controlled the monetary system and set all prices and wages politically. In doing all this, fascism denatured the marketplace. Entrepreneurship was abolished. State ministries, rather than consumers, determined what was produced and under what conditions.
Fascism is to be distinguished from interventionism, or the mixed economy. Interventionism seeks to guide the market process, not eliminate it, as fascism did. Minimum-wage and antitrust laws, though they regulate the free market, are a far cry from multiyear plans from the Ministry of Economics.
Under fascism, the state, through official cartels, controlled all aspects of manufacturing, commerce, finance, and agriculture. Planning boards set product lines, production levels, prices, wages, working conditions, and the size of firms. Licensing was ubiquitous; no economic activity could be undertaken without government permission. Levels of consumption were dictated by the state, and “excess” incomes had to be surrendered as taxes or “loans.” The consequent burdening of manufacturers gave advantages to foreign firms wishing to export. But since government policy aimed at autarky, or national self-sufficiency, protectionism was necessary: imports were barred or strictly controlled, leaving foreign conquest as the only avenue for access to resources unavailable domestically. Fascism was thus incompatible with peace and the international division of labor—hallmarks of liberalism.
Fascism embodied corporatism, in which political representation was based on trade and industry rather than on geography. In this, fascism revealed its roots in syndicalism, a form of socialism originating on the left. The government cartelized firms of the same industry, with representatives of labor and management serving on myriad local, regional, and national boards—subject always to the final authority of the dictator’s economic plan. Corporatism was intended to avert unsettling divisions within the nation, such as lockouts and union strikes. The price of such forced “harmony” was the loss of the ability to bargain and move about freely.
GE sees the fascist handwriting on the wall and now appears to bowing down in order to survive, thrive and profit. I am sure that no one is going to be hearing about this story, now that we will have wall-to-wall coverage of Ted’s passing. BTW, I completely disagree with the title of this article because I believe that if GE thinks they got the narcissist-in-chief’s number, they are sorely mistaken.
“The intersection between GE’s interests and government action is clearer than ever,” General Electric Vice Chairman John G. Rice wrote in an Aug. 19 e-mail to colleagues.
Rice was calling on his co-workers to join the General Electric Political Action Committee. “GEPAC is an important tool that enables GE employees to collectively help support candidates who share the values and goals of GE.”
The full letter suggests that “share the values and goals of GE” really means “support policies that profit the company.”
Steve Milloy, a pro-free market investor at the Free Enterprise Action Fund, obtained this e-mail and says it reveals General Electric for what it really is. “GE is lobbying to become the biggest rent seeker this country has ever seen,” Milloy told this column. Rent seeking is using government legislation or regulation to generate private profits the free market wouldn’t provide.
“On climate change,” Rice wrote, “we were able to work closely with key authors of the Waxman-Markey climate and energy bill, recently passed by the House of Representatives. If this bill is enacted into law it would benefit many GE businesses.”
Most of all, Waxman-Markey would profit a GE joint venture called Greenhouse Gas Services, which deals in greenhouse gas credits, products that have value only if a cap-and-trade bill like Waxman-Markey passes.
The leaked e-mail shows how tightly GE connects PAC contributions and lobbying efforts. “Our Company is heavily impacted by a number of issues pending in Washington this fall,” Rice wrote.
GE spent more on lobbying in the second quarter of this year than did any other company, according to federal lobbying files. Since 1998, GE has been the king of lobbying expenditures, according to the Center for Responsive Politics, outpacing its runner-up by 40 percent.
Last election, GEPAC spent $2.4 million, with a slim majority going to Democrats. So far this year, two-thirds of GEPAC money has gone to Democrats.
Rice’s description of how PAC contributions help the company (“we must also make sure that candidates who share GE’s values and goals get elected to office”) belies the true dynamic in political giving, as the rest of the e-mail suggests.
By calling for PAC contributions in the context of GE’s lobbying efforts in coming weeks, Rice is clearly not talking about electing pro-GE candidates in November 2010. He is talking about making current congressman more pro-GE.
If GEPAC was just trying to “make sure that candidates who share GE’s values and goals get elected to office,” why would the PAC give $15,000 each to the Republican and Democratic senatorial campaign committees? Those contributions cancel each other out if they are considered ammunition for allies in electoral battles. But they complement one another if they are considered the ticket price to access with lawmakers.
The recipient list of GEPAC cash also suggests the PAC is more about access to power brokers than support for friendly politicians.
The “intersection between GE’s interests and the government’s actions” is plenty crowded. GE is betting on climate change legislation, high-speed rail funding, electric car subsidies, embryonic stem cell grants, expanded federal health care spending, subsidies for renewable energy, defense contracts and continued financial bailouts.
GEPAC pays the tolls to make sure all this traffic gets through.