One of the startling things about this election year is the bland acceptance by millions of ordinary Americans of the idea of socialism.
People don’t really understand what it means, or how it destroys prosperity.
It’s great to want the best for everybody, but the further we go down the path of government control of the economy, the more we suffer economic stagnation. Nobody will take risks or set alarm clocks knowing that the government might suddenly change the rules or redistribute the rewards.
Worse, the escalation of government power can erode freedom with shocking speed.
In April, 2009, General Electric CEO Jeffrey Immelt told shareholders at the company’s annual meeting in Orlando that the global economic crisis had “fundamentally reset” the way companies do business and capitalism itself.
His words echoed White House talking points. At the time, President Obama was “resetting” the rules so Chrysler and General Motors bondholders would get significantly less than they were owed and union employees would get more than the law required. Talk of “nationalization” of banks and industries floated in the air like soot.
As the CEO of a company founded in the 19th century by the inventor of the electric light bulb, Immelt might have been expected to stand up for capitalism as the economic system that had provided the greatest prosperity and the highest standard of living for the most people in the history of civilization.
But the financial crisis had hit GE hard with losses from credit cards, mortgages and commercial real estate in its financial unit, GE Capital. The company had recently lost its AAA credit rating and had just cut its quarterly dividend by 67 percent, the first reduction since 1938. The White House was pummeling the financial sector – one day with carrots, one day with sticks. In early 2009, the safest place for a CEO to be was on his knees to the president.
There was another reason for GE’s chief executive to beg the favor of the government: $2 trillion in worldwide stimulus spending. Immelt told shareholders the company had positioned itself for recovery with a focus on products that the government would buy, approve or subsidize, like windmills and new health care technology.
But shareholders lined up at the microphones to grill Immelt about something else: political bias at the TV networks the company then owned. “The crowd was very upset with MSNBC because of its leftward tilt,” one attendee told the Hollywood Reporter. The trade paper said the shareholders’ microphone was cut off during the “umpteenth” question about slanted news coverage.
It was no accident that GE’s TV networks were fawning over the Obama administration. The New York Post had just reported that Immelt and NBC Universal President Jeff Zucker berated CNBC’s executives at a three-hour secret meeting where they accused the business news channel of “beating up on Obama too much.”
Immelt insisted to shareholders that he “takes a hands-off approach to what is reported on the company’s news networks.” Of course, some people can communicate without using their hands.
It’s a visible example of how too much government control of the economy extends the power of the state to the workplace, making criticism of the government a career-ender, or worse.
So it’s very good news for freedom that in Jeff Immelt’s latest letter to shareholders, he wrote, “The difficult relationship between business and government is the worst I have ever seen.”
Immelt recently told an interviewer that businesses should not wait on the government for trade deals or other assistance. “Chart the path on your own,” he said.
That has always been the road to prosperity. It’s good to be back on it.
Susan Shelley is an author, a former television associate producer and was two-time Republican candidate for the state Assembly.
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