Published On: Fri, Jul 22nd, 2011

Bringing Good things to Their Life

Something to think about: General Electric is so good at doing their taxes, the government pays them. In 2010, the company enjoyed global profits of $14.2 billion, $5.1 billion of which came from the U.S. But through a combination of offshore accounts and aggressive lobbying, not only did GE pay no taxes, buteven get a benefit of $3.2 billion.  Apparently the $200 million they paid lobbyists over the last decade paid off big.  At one point, when a generous tax break was about to expire, the head of GE’s tax team met with Congressman Charles Rangel, then chairman of the ways and means committee, and begged for an extension on one knee.  GE got their extension, and Rangel got a $30 million gift for New York City schools.

Clearly, these two know what's best for us all

These are the same cats that have slashed their American work force to fewer than 150,000 jobs, although they continue to expand internationally, now employing over 300,000 workers worldwide.  GE’s President Jeffrey Immelt, the president’s newest CEO advisor, says that he wants to create jobs in the United States. You remember Immelt:  Obama appointed him to head the President’s Council on Jobs and Competitiveness.  Love the irony.

The president and Immelt visited a GE plant in Schenectady, New York, this past January to celebrate $45 billion in new trade deals with China, like the joint venture GE  signed with China AVIC, an avionics firm that supplies components to both civilian and military jet makers in China. GE promises that the deal will create jobs in the United States, but they are transferring key avionics technology to China AVIC. GE put $200 million and its technology in the deal, and the Chinese partner is putting up $700 million. GE is effectively selling its treasure.

promises, promises

This is supposed to be a 50-year deal, but the way these deals usually work, the Chinese will appropriate GE’s technology and then kick them out in a few years. It is not inconceivable that within 10 years China AVIC will be the global leader in avionics, and GE will be out of another business. China’s indigenous innovation policies force foreign companies who want to do business in China to transfer technology to Chinese firms. so the deal may boost short-term profits and Jeffrey Immelt’s bonus, but thousands of American jobs will disappear. When he stops bloviating, maybe Ed Schultz can represent those workers.

About the Author

- We made the journey from hard left to serious right a long time ago, but still have a laissez faire attitude and a finely tuned sense of the ridiculous.