Obama and Immelt

http://www.futureofcapitalism.com/2011/01/obama-and-immelt

Am I the only one a little bit uncomfortable with Jeffrey Immelt chairing President Obama's "President's Council on Jobs and Competitiveness" while also continuing to serve as chairman and chief executive of General Electric?

In the Washington Post op-ed announcing his own appointment, Mr. Immelt writes, "The assumption made by many that the United States could transition from a technology-based, export-oriented economic powerhouse to a services-led, consumption-based economy without any serious loss of jobs, prosperity or prestige was fundamentally wrong." That's a straw man, but his point is to call for a government jobs strategy aimed at "making the United States the world's leading exporter in the 21st century." Oh, and it just so happens that GE is "one of America's largest exporters."

Nothing against the president seeking advice from the private sector. But the way a lot of the press coverage reads, it sounds like Mr. Immelt is joining the president's economic policy team. If Mr. Immelt wants to do that, nothing is stopping him from stepping down from GE and doing it full time. GE shareholders might be annoyed that their CEO is hanging around with the president rather than running their company, but they probably figure having a CEO who hangs around with the president can only help their company, which both sells lots of stuff to the government and is affected by its policy decisions on everything from federal guarantees of GE Capital debt to federal subsidies for GE wind turbines, federal funding for GE healthcare products such as MRIs, and the federal stance on the dollar that can affect exports. What about GE's competitors whose CEOs aren't chairman of some President's Council on Jobs? Will the competitors create fewer jobs because of government policies that wind up favoring GE at their expense?

I realize that there are lots of conflicts in life and that they can usually be managed and disclosed rather than totally avoided. And I certainly don't want to prevent the president from getting advice from the private sector. But there's something about this particular situation that seems like a recipe for trouble.

by Ira Stoll  |  Jan 21, 2011 at 10:26 am Related Topics:  Energy, General Electric, Health Care, President Obama receive the latest by email: subscribe to the free futureofcapitalism.com mailing list