President Obama has been on a charm offensive with independent voters by trying to convince them he is pro-business and it’s been working with his approval numbers climbing steadily. Republicans have been losing their talking points with Obama signing the renewal of the Bush tax cuts, appointing a Wall Street banker as WH Chief of Staff and announcing a drive for pro-business reform of all Federal regulations.
The latest thing was to appoint the new head of the President's Council on Jobs and Competitiveness which used to be called the President's Economic Recovery Advisory Board. It’s a great political move but really he’s just given up on that recovery thing and is handing the care of the remaining hens in the chicken house to the foxes.
It might seem appropriate to appoint somebody who has created more jobs than anybody else to head this board but he picked Jeffery Immelt the CEO of GE instead. To be fair he has created a lot of jobs but they were all in China and India. GE does 60% of its business outside the US and this sounds great that a US company is doing so much business, that must mean they bring a lot of money back to the US. You can guess how that really works.
More than half of the imports into the US are purchased by US companies from the overseas division of the same company and laundered through tax haven countries. This allows them to keep all their profits overseas by jacking up the prices they pay themselves. In fact US companies pay much higher taxes in China than they do here. The Chinese aren’t stupid like we are. Two thirds of US corporations pay no taxes in the US, they all pay taxes in China.
Jeffery Immelt got into considerable hot water recently giving a speech to European businessman where was whining about how badly China treats foreign companies. He even suggested they might all leave China. GE disavowed his remarks before he sat down from speaking. Immelt thinks the world is flat and he can go from country to country driving down wages and making the big bucks.
China thinks somewhat differently, Immelt can do as much damage to the US economy as he likes but as China moves aggressively to dominate the world he will bump up against them wherever he goes. The more damage Immelt and his kind do around the world, the more popular China becomes with its trading partners. Immelt can’t push China around and this upsets Mr Immelt but he still has a free hand here, so life isn‘t so bad. www.prairie2.com