STAFF NEWS & ANALYSIS
GE Exec Says Economic Crisis Resetting Capitalism
By - April 23, 2009

The top executive of General Electric Co. said Wednesday he couldn't predict when the recession would end or how bad it will be, but said the global economic crisis has "fundamentally reset" the way companies do business and capitalism itself. Speaking at GE's annual shareholder meeting in Orlando, Florida, following what has been a punishing year for the conglomerate, CEO Jeff Immelt (pictured left) said the downturn was the worst since the Great Depression, and that it would ultimately lead to changes such as greater government involvement in business and a restructuring of the financial services sector that was a root of the crisis. "We are living through history, and I don't mean that in a positive sense," said Immelt, who heads one of the world's largest companies that makes products like jet engines and refrigerators but also has a big financial unit. Immelt told investors "2008 was tough and 2009 is also going to be tough." He added that it was hard to predict "how bad this will be and how long" the recession will last. He tried to assure shareholders that GE has positioned itself for an economic recovery, with a new focus on products that could capture some of what GE estimates is $2 trillion worth of government stimulus spending worldwide. That includes windmills and other clean energy equipment and new health care technology to better diagnose illnesses like Alzheimer's disease. – AP

Dominant Social Theme: New thinking for a new age.

Free-Market Analysis: General Motors is pinning its future on a car the size of a toaster. Now General Electric is going to focus on windmills? Meanwhile, the new economy, according to Jeff Immelt, is going to include a healthy dollop of government involvement. And by government, we don't think Immelt has in mind the township form; we believe he is forecasting big-time federal involvement.

Sometimes, it seems that the West in general and America in particular is getting a bit like one of those funny, old Eastern European states during the cold war where average folk parsed the sentences of the powerful — and even their meetings in order to figure out what the heck was going on. The mainstream media's ability to do the job obviously continues to decline, this being the case. Examples? President Obama serves a single glass of water to each Wall Street banker that visits him and sits around his big conference table – and, yes, as it turns out this is a sign of his disapproval. Accounts of the meeting leak out much later in which it is said that the government won't allow TARP funds to be returned – meaning that the government will continue to call the shots on behalf of "taxpayers."

We asked (not expecting an answer) long ago why the American federal government was using taxpayer money to bail out various sectors of the economy. We pointed out quite reasonably, we thought, that the Federal Reserve had plenty of money available (since it can print all the money it wants) to do the job. They're already printing some US$2 trillion (actually much more than that), so what would another trillion amount to? Would it hike the rate of inflation appreciably? The Fed's Ben Bernanke has said he is not worried about inflation, so why didn't he just go ahead and do it? Now we know the answer apparently. If the taxpayers pay for it, then both congress and the executive branch can rise up in righteous indignation if those who have accepted funds do something that is not politically correct, like ride in a private airplane. Taxpayer funds evidently give the American government a big stick with which to beat corporations over the head. It's not only happening here, but in Britain, Germany and other Western countries as well.

We can't help but wonder where all this is headed. America – and Europe's – biggest corporations are all competing neck and neck to go "green" – which apparently means building the smallest possible car while figuring out ways to provide energy without using copious amounts of oil and gas that continue to occupy major parts of the earth's mantle and are easily available for mining. We are told that the usage of such materials injects carbon dioxide into the air and therefore the use of such energy sources ought not to be allowed. Never mind that a scientific trip last year to the Arctic, sponsored by NASA, returned with "images and data showing that red-hot magma has been rising from deep inside the earth and blown the tops off dozens of submarine volcanoes, four kilometres below the ice." The scientists maintained that all this volcanic activity couldn't be heating up Arctic ice – though they were a bit foggy on how much carbon dioxide these massive lava flows were adding to the earth's atmosphere.

"The scale and magnitude of the explosive activity that we're seeing here dwarfs anything we've seen on other mid-ocean ridges," says geophysicist Robert Sohn of the Woods Hole Oceanographic Institution, [who led the expedition]. The volume of gas and lava that appears to have blasted out of the Gakkel volcanoes is "much, much higher" than that seen at other ridges. – Canada.com

After Thoughts

Water, food, energy, oil … there just doesn't seem to be enough to go around. You know, there's even a theory that oil is abiotic (not a "fossil fuel") since oil wells keep filing back up in the United States and elsewhere. Say, maybe oil is manufactured deep underground and seeps slowly to the surface without the help of biological decay. You would think the media would cover such a thing, but for some reason it doesn't on the whole.

And what about money, while we are on the subject of scarcity. There doesn't seem to be enough money to go around even though Western central banks are printing trillions. Maybe gold would be a better option. At least you can go prospecting and dig it up, if all else fails. Oh, wait, it's illegal to treat gold as money. Our conclusion: a lot of scarcity in the world despite such apparently generous supplies of so many essentials. Very strange.

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