Being Open to the Opinions of Others Matters

Much to my surprise I was called a "leftard" this morning after questioning a photo that included the caption "socialism has a documented record of colossal failure. World history has proven that. Socialism is NOT AN OPTION in America. Capitalism is how America became a super power." These early morning discussions are probably not for me, as I would rather not do such ideological battles so early. For example: "It is an inescapable fact of life" that "all wealth comes from thrift and productivity" I was told in a discussion about the ills of socialism in praise of capitalism. I pointed out that historically the statement was patently false. The Wealth of Nations has been built on centuries of free labor and indentured servitude, and that big banks and big business have always run the government. I included the Theodore Roosevelt quote that "behind the ostensible government sits enthroned an invisible government owing no allegiance and acknowledging no responsibility to the people." I identified this "invisible government" as big business. In the praise of American capitalism and the decline of socialist states in Europe, I countered that we are presently in economic decline because of a system of capital sanctioned by the government that allows "too big to fail" and disables us from making our own toilet bowl brushes. I noted that there are no pure -isms of any sort. I pointed out that Iceland had a booming economy, clean energy initiatives, and a great educational system. Then entered Goldman Sachs. I quoted Nassim Nicholas Taleb that we "socialize debts and privatize profits." Regarding big business and small business, I made the distinction that "thrift and productivity" have been the hallmark of small business success, but not so much with big business. Government through trade policies tinker with productivity (often immorally when you consider the success of companies like Apple's production in Asia--as I type on my MacBook--sigh!), and bailout to the likes of GE to the tune of billions when thrift has long not been a hallmark of business and the engineering that once made that company great has largely been replaced with financial engineering tantamount to Wall Street gambling. There were several replies that insisted that after all of the above and more that I had not answer the "simple" question about where wealth comes from. The discussion ended for me with jingoism about freedom and capitalism, and how Beijing after embracing capitalism soars. Differences of opinions I do not oppose, but often our differences are packaged in idealism and ideology which do not move discussions forward. How do we extract ourselves in order to really hear what others are saying? I suppose humility is a big factor here. I will examine myself further.

Being the People We Have Been Waiting For

While we need to draw attention to legislation that have made investment banks and corporations such as GE and AIG like commercial banks with depositors with the protection of the government that are themselves now too big to fail, why don’t communities do something about this? Commercial banks couldn’t survive without our deposits and investment banks couldn’t subsist without our investment. Goldman Sachs, for example, is heavily invested in cities throughout the country and many throughout the globe. We have to get creative and rebuild smaller thriving communities and essentially create the likes of Black Wall Street. But this time the segregation will be by choice. (Desegregation, by the way, helped to destroy the concentrated wealth of Black Wall Street.) We need to collectively segregate our capital and pool it in ways that will directly benefit the communities where we live. We are indeed the people we have been waiting for and in this regard it has nothing or little to do with elected officials and chief executive officers.

Being Tax Exempt

Leona Hemsley was right: "Only the little people pay taxes." According to Forbes magazine the largest U.S. corporations paid no taxes last year. The "most egregious" of these were General Electric and Exxon Mobil. GE "generated $10.3 billion in pretax income, but ended up owing nothing to Uncle Sam. In fact, it recorded a tax benefit of $1.1 billion." (Didn't GE benefit from billions in the bailout via AIG?) Exxon reported making $45.2 billion in profit and paid no, zilch, nada taxes to the IRS.

How do these companies not pay taxes? Forbes noted that "Exxon tries to limit the tax pain with the help of 20 wholly owned subsidiaries domiciled in the Bahamas, Bermuda and the Cayman Islands that (legally) shelter the cash flow from operations in the likes of Angola, Azerbaijan and Abu Dhabi. No wonder that of $15 billion in income taxes last year, Exxon paid none of it to Uncle Sam, and has tens of billions in earnings permanently reinvested overseas. Likewise, GE has $84 billion in overseas income parked indefinitely outside the U.S."

In 2008 the Government Accountability Office found that "two out of every three United States corporations paid no federal income taxes from 1998 through 2005." So, can we agree that what Leona Hemsley said was true and that she undoubtedly went to jail not because she did anything different than many others in her tax-exempt bracket but because she was stupid enough to say so?

Being General Electric II

A few months ago I wrote a post, Being General Electric, where I bemoaned the fact that a once great manufacturing company had become a financial one which became the downfall of its greatness. Yesterday, Jeff Immelt, the CEO of GE, spoke before the Detroit Economic Club. Below are excerpts from his speech with my analysis in between. The outline was taken from an article, American Renewal: Immelt Addresses the Detroit Econ Club.

"Many bought into the idea that America could go from a technology-based, export-oriented powerhouse to a services-led, consumption-based economy — and somehow still expect to prosper. That idea was flat wrong."

NO KIDDING!!!!!!!!!! I LIKE THIS GUY!!! (I HOPE HE'S NOT HERE IN DETROIT MERELY PREACHING TO THE CHOIR!)

"Recently my colleague Peter Loescher, the CEO of Siemens, extolled the importance of Germany as an exporting country. In my career, I have never heard an American CEO say that the United States should be leading in exports. Well, I am saying it today: This country ought to be, and we can be, not just the world’s leading market but a leading exporter as well. GE plans to lead this effort. We have restructured during the downturn, adjusting to the market realities. At the same time, we are increasing our investments. We plan to launch more new products during this downturn than at any time in our history. We will sell these products in every corner of the world. We are creating a better company coming out of this reset. Similarly, America needs a dramatic industrial renewal. We have to move forward on five fronts."

First: Increase investment in research and development. "GE has never forgotten the importance of R&D. Each year, we put six percent of our industrial revenue back into technology — so much that more than half of the products we sell today didn’t even exist a decade ago. As a consequence, we are a huge exporter… GE’s R&D budget has not been cut. And that’s a course of action I’d recommend to every company that wants to get through the economic crisis even stronger than before."

YES!

Second: America should get busy addressing the two biggest global challenges — clean energy and affordable health care. "There is no question whether there will be breakthroughs in these areas — just by who and when. The leader in these fields will dominate the global economy in the decades that come."

WE SEEMED NOT TO HAVE CARED MUCH ABOUT THE FUTURE BY SIMPLY NOT ADEQUATELY PREPARING FOR IT.

Third: We must make a serious commitment to manufacturing and exports. "This is a national imperative. "We all know that the American consumer cannot lead our recovery. This economy must be driven by business investment and exports… America has to get back in that game … and it starts with a strong core of innovation."

MANUFACTURING AND EXPORTS??? YES!

Fourth: We should welcome the government as a catalyst for leadership and change. "There’s a long history in this country of government spending that prepares the way for new industries that thrive for generations. Think of the NIH or NASA, and all the new innovations that came out of these programs — from computing to communications to healthcare. America has that kind of chance with unprecedented levels of new government investment. ... The key is making sure those hundreds of billions of dollars fall on the fertile ground of innovation, and not bureaucracy."

INNOVATION, NOT BUREAUCRACY??? HELL, YEAH!!! I WONDER HOW MR. IMMELT TAKES CHALLENGES TO HIS OWN IDEAS AND AUTHORITY? I HOPE WELL! GOD, I HOPE SO!!!

Fifth: It is possible for a global business leader to also be a good citizen. "We must partner in our communities. Big business should work with smaller companies in our supply chain to help them compete globally. And we should partner with local governments to fix our education system. In the end, business leaders are accountable for the competitiveness of their own country. We must say so publicly. This will not hurt our ability to globalize. Rather, I think it will make other countries admire our business leaders more. We must end the impression that American CEOs are short-term speculators."

NO TRUER WORDS COULD HAVE BEEN SPOKEN! WOULDN'T IT BE GREAT IF GE COULD ACTUALLY ACCOMPLISH THESE THINGS???

With Mr. Immelt's leadership, General Electric may be able to rise again. Let's hope so!