If you want to understand why a lot of America’s youth embrace socialism today, just look at this small but revealing story about General Electric. Former CEO Jeff Immelt apparently didn’t just fly around the world in a corporate jet, a fairly standard practice, he had an empty spare corporate jet follow him around just in case anything happened to the jet he was actually using.
Now that the news has come out, supposedly the board wasn’t informed about this, and even Immelt himself says he didn’t know. How convenient. The plane had a bogus passenger manifest designed to make it look occupied, and everyone was instructed to keep it hush, hush.
Immelt was flying around like this with the shareholders’ money, not his own. GE under-performed during his tenure, but Immelt’s pay and perks sure didn’t underperform.
Will anything bad happen to anybody as a result of this stupendous waste of shareholder money? Not likely, unless some junior people need to be offered up as scapegoats.
Is it any wonder more and more people are less than impressed with today’s corporations?
This piece originally appeared on Urbanophile.
Aaron M. Renn is a senior fellow at the Manhattan Institute, a contributing editor of City Journal, and an economic development columnist for Governing magazine. He focuses on ways to help America’s cities thrive in an ever more complex, competitive, globalized, and diverse twenty-first century. During Renn’s 15-year career in management and technology consulting, he was a partner at Accenture and held several technology strategy roles and directed multimillion-dollar global technology implementations. He has contributed to The Guardian, Forbes.com, and numerous other publications. Renn holds a B.S. from Indiana University, where he coauthored an early social-networking platform in 1991.
Photo: JD Lascia, via Flickr, using CC License.
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Corporatism is not capitalism
America's youth correctly see corruption in all of our large institutions-government and corporations. This is actually not a feature of capitalism, but a feature of statism and corporatism, where the game is rigged by the insiders. Large corporations like GE are not capitalist, they are "corporatist", relying on favored treatment from government, gaming the regulatory system to reduce competition, and taking risks with other people's money (shareholders). Unfortunately, the significant distinction between crony corporatism and true capitalism is not recognized and capitalism shoulders the blame for all of this, with socialism--treated as the inverse of capitalism--proposed as the solution. The irony is that socialism is just a more advanced version of statism and therefore instead off applying the brakes to the problem, you are in fact stepping on the gas!