GE made the mistake of embracing Obama's economic model

Tim Carney:
Sometimes we look back a decade or so and reconsider our word choice. For instance, I used to call General Electric — with its heavy lobbying, its intimate ties to the White House, all its bets on green energy, on embryonic stem cells, on Obamacare, on industrial policy — the “for-profit arm of the Obama administration.”

Those words were ill-chosen. Specifically, in describing GE, it was a mistake to use the word “profit.”

No company has spent as much on U.S. lobbying since 2000 as General Electric. And no component of the Dow Jones Industrial Average has performed worse since 2000 than General Electric.

The company’s stock is tanking. Its profit margins range from sclerotic to negative. Its recent big bets on Europe and green energy are proving to be duds. GE has already sold off its appliance business and is trying to find a buyer for its light bulb business.

That’s not enough, according to some major investors, one of whom has called for a full breakup of GE.

It’s a sad state for a company that has represented industrial strength for more than a century. It’s also a telling epigraph for Obamanomics.
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During the Obama administration, GE was rife with poor decisions and poor timing.   Its embrace of alternative energy was a serious mistake.  The existing technology was not ready to support the growth needed to make it profitable. It is still the least efficient form of energy which produces the least amount of energy per man hour expended and is unable to scale up or down to meet demand.

It dabbled in the oil service business before the oil bust and the attempt to extricate itself as the shale market returned.  It will be interstring to see what kind of write down the company took in the fourth quarter of 2017 to beat the lower tax rate.  A write down at the higher tax rate is worth much more than a write down at the lower rate.  They might also be able to recapture some taxes already paid at the higher rate if the recognize the losses before 2018.  BTW, I am not an accountant, but as a former corporate attorney, I have seen these accounting devices used.

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