Today, President Obama welcomes Jeffrey Immelt to his White House inner circle as chair of a newly created jobs council after saying good-bye to economic adviser and Wall Street critic Paul Volcker, who is leaving after a two-year term. Is this good news for workers... or corporate executives? Our economic brains at the Roosevelt Institute weigh in.
Volcker out and Immelt in, because the administration now wants to emphasize 'recovery' and 'jobs' instead of 'crisis stabilization'? Since when did any stabilization not include jobs as a top priority? What we actually have here is the disappearance from the scene of the best known and most visible critic of the excesses of the financial sector and his replacement by the sitting CEO of a company that is heavily dependent on government aid of all sorts, including diplomatic assistance to invest more in China. This is not about jobs, but political money -- the White House knows that after Citizens United, it will need to raise about a billion dollars -- that's right, a billion -- for its reelection campaign. That's the context in which this and its other recent appointments need to be judged. ~Thomas Ferguson, Roosevelt Institute Senior Fellow and Professor of Political Science at U Mass, Boston
President Obama seems to be putting all efforts into cultivating the confidence of the corporate community. One can see the appointment of Mr. Immelt in this light. It is an interesting question as to whether the CEO of a multinational corporation that employs many people outside of the USA will be a leader who aligns his thinking with the needs of the American people and job creation within the 50 United States. Corporations with large Foreign Direct Investments have very interesting incentives regarding military spending, exchange rate negotiations and labor policies that may not align with the well being of our citizens. It is important that Mr. Immelt embrace the larger concerns of U.S. society if he is to be a successful public servant and foster the reelection of President Obama in 2012. ~ Robert Johnson, Roosevelt Institute Senior Fellow and Director of the Institute for New Economic Thinking
GE Capital, the major subsidiary of GE, is a major shadow bank. It used GE's high-quality credit rating to become a major player in the capital markets, much in the same way AIG FP used the boring insurance industry's high credit rating. GE Capital was the single largest issuer of commercial paper going into the financial crisis...GE has been at the forefront of blurring a 'financial services'-centric model of business onto the remains of a hollowed-out manufacturing base, one kept in a minimal state just strong enough to qualify for high credit scoring...All in all, not especially a big win for the Jobs and Competitiveness. ~ Mike Konczal, Roosevelt Institute Fellow (read further analysis from Konczal on this topic here).
*Ferguson's comments also appeared in a press release put out by the Institute for Public Accuracy.
Cross-posted from New Deal 2.0.