Yesterday, arch rent-seeker Jeffrey Immelt, General Electric CEO and Obama’s job czar, headlined the “Campaign for Free Enterprise” job summit. In typical fashion, Immelt had little concern for free enterprise or job creation. Since the beginning of the Obama administration, GE has realized that lobbying for big government, subsidies, and tax credits is far more profitable than competing and profiting from merit.
GE has chosen to specialize in rent-seeking behavior and has directly receiving millions of dollars from Obama’s stimulus and much more cash indirectly. GE notoriously paid zero taxes in 2010. GE has continuously lobbied Congress for beneficial legislation, while contributing millions to top-down spending Democrat cronies to achieve these ends.
In Immelt’s speech at the “Campaign for Free Enterprise,” he maintained the GE status quo of rent-seeking by advocating for a repatriation tax holiday, a tax break for U.S. companies to bring their overseas profits to the U.S. While at first glance this seems like an excellent idea -- bring some liquidity to the U.S. financial system and maybe even create some jobs -- as with everything with GE, there are government strings attached. Immelt proposes with the tax holiday the creation of an infrastructure bank, funded by the tax revenues received from repatriations. In true GE fashion, the purpose of this financial policy is for GE to benefit from government subsidies from the infrastructure bank, and with Obama in charge, there is no doubt GE will be one of the largest beneficiaries of this government spending.
In Congress now is the Freedom to Invest Act of 2011, which calls for the tax holiday on foreign earnings of multinational corporations. Even though this bill is not perfect, government still controls commercial behavior to the extent it chooses what the repatriated funds can be used for and is not a permanent tax break on the U.S. corporate tax (which would continuously bring funds to the U.S.), it does not support crony capitalism. It is pertinent that Congress is not swayed by the supporters of the infrastructure bank such as former SEIU boss and Obama confidant Andy Stern and Jeff Immelt. The clear motivation for an infrastructure bank idea is to limit competition and quench the subsidy thirst of big labor and rent seekers. In a time of financial crisis, the needs of special interest groups should be of no interest to legislators. The focus of policy must be to remove the barriers in order to truly create jobs and liquidity in the U.S. economy for the people of America, not large political contributors to the Democratic party.