Wait, now the right hates General Electric?
By James Ledbetter
The opinions expressed are his own.
For many years, the River Café, an elegant restaurant that sits just below the Brooklyn Bridge, had a plaque on its wall declaring, in effect, “If you work for General Electric, go eat somewhere else.”
This unusual exclusion policy had a simple explanation: for three decades, two GE plants in upstate New York dumped as much as 1.3 million pounds of polychlorinated biphenyls (PCBs) into the Hudson River, poisoning the fish supply that River Café depends on. The effect that this contamination had on wildlife—and on anyone who ate too much fish caught in the Hudson—was severe enough to create one of the largest Superfund projects in the history of the Environmental Protection Agency.
The Hudson pollution was not unique; the bend of the Housatonic River in Connecticut where I grew up was frequently unswimmable, because of PCBs floating down from a GE plant in Pittsfield, Massachusetts. Another aqueous assault, another massive
taxpayer-funded cleanup. (Update: A GE spokesman tells me that the company paid for the cleanup of both rivers. Of course, there were also costs to taxpayers, but this is an important distinction.)
Thus, you didn’t have to own a fish restaurant to have a negative opinion of General Electric. Indeed, on the American left in the 1980s, GE was about as comprehensive a corporate bogeyman as could be imagined, and was the target of one of the few anti-corporate documentaries to win an Academy Award. In addition to its overt environmental sins, the company made nuclear power plants. It made nuclear weapons. It was one of the largest military contractors in the country, which made its ownership of a major broadcast network seem disturbing. It paid so little in corporate tax in the 1980s that it apparently offended Ronald Reagan’s sensibilities—and he’d been a GE spokesman!
So it was jarring to read in the Wall Street Journal this week that GE is now a punching bag for the political right. Sarah Palin has charged on her Facebook page that GE has become “the poster child of corporate welfare and crony capitalism.” When Newt Gingrich attacked GE for paying no taxes during the Tea Party-sponsored presidential debate last month, the audience applauded—twice.
What is going on here? How did a venerable left-wing target become an apparently convenient right-wing target?
There are three political aspects of the right’s attack on GE which, while a little sudden and certainly open to charges of hypocrisy, are easy to explain. First, in many cases, the attackers try to establish an explicit link between GE and the Solyndra affair, hoping to whip up voter anger over the idea that government in general, and the Obama administration in particular, is throwing money at companies and thereby reviving that scary industrial-policy no-no of picking winners and losers. The logic here is questionable—with $12.6 billion in profits last year, GE is no Solyndra—but the issue of how much money the federal government should invest in private companies is certainly open to debate.
A second political motivation has to do with who’s inside the GE charm circle and who’s outside. GE CEO Jeffrey Immelt may not have calculated just how much political capital he was investing when he decided to become the Obama administration’s “job czar” last January—or exactly what the return on that investment would look like. On top of Immelt’s coziness with Obama, there has been a modest but significant shift in how GE spends its political dollars. While GE continues to give large sums to both parties, according to figures compiled by the Center for Responsive Politics, it gave more to the GOP in every political cycle from 1996 to 2006, but switched in the 2008 cycle to modestly favor Democrats. (Interestingly, one of the top recipients of GE money in the current cycle is Mitt Romney, who’s made a lot less noise about GE’s “crony capitalism” than some of his opponents.)
Finally, remember the all-important independent voter. There’s long been a small overlap between left-leaning populists and right-leaning independent voters (think Ralph Nader), and right-leaning populists and left-leaning independent voters (think Ron Paul—you’ll see more than a few “End the Fed” T-shirts and drug-legalization sympathizers at the Occupy Wall Street camp). These may not be viable long-term strategies, but if you’re Newt Gingrich at this stage in the GOP contest, you get your votes by any means necessary.
Beyond the political hall of mirrors, it’s worth pointing out that GE is in crucial respects a different company than it was when the left was pillorying it in the ‘80s and ‘90s. Gone is the conflict of interest of owning a majority of NBC (Comcast now does). Gone, mostly, is the involvement with nuclear weapons (that business got sold to the company that merged to become what is still a left-wing target: Lockheed Martin). On the current list of the largest military contractors in the U.S., GE doesn’t even make the top 20.
GE’s meager tax bill remains an issue; perhaps it should be considered progress that the right has now joined the left in thundering over it. The issue of “crony capitalism,” however, is loaded in a way that makes political consensus seem unlikely. Back in the days when the Pentagon was signing GE’s checks, there were few cries from the right about anything improper. Surely believers in the free market don’t expect the federal government to build its own nuclear weapons, and since only a handful of companies can do that anyway, well, cronyism seems like a necessary byproduct.
Today, though, GE’s relationship to government is different. As three Harvard Business professors point out in their new book Capitalism at Risk, GE experienced a somewhat unexpected bonanza following the financial meltdown of 2008. That is: from Beijing to Washington, stimulus programs were earmarked for projects that could be accomplished in the most environmentally friendly ways practical: clean-coal demonstration projects, electric-grid modernization, etc. –the very technologies that GE has been pushing over the past decade.
That, you see, is the connection the Tea Party is making to Solyndra. They don’t think there should be government stimulus, they *certainly* don’t think stimulus should have green earmarks, and they feel betrayed that GE is now in the vanguard of both. Such positions may be harder to maintain if the GOP ends up back in the White House, but for now, it’s apparently good Republican politics to bash GE.
Oh, by the way: the River Café tells me they’ve taken down that plaque.
PHOTO: U.S. President Barack Obama (R) talks with council chairman, General Electric CEO Jeffrey Immelt (L), after a meeting of the President’s Council on Jobs and Competitiveness at the International Brotherhood Of Electrical Workers Local Union #5 Training Center in Pittsburgh, Pennsylvania October 11, 2011. REUTERS/Jonathan Ernst