Financial Times: The Worst of Times?


Before reading this bit about a sobering set of messages offered at a very nice Financial Times reception, the must read assignment first is Martin Wolf’s “Japan’s Lessons for a World of Balance-Sheet Recession.”
Now you can proceed. . .
The Financial Times held a swanky, A-crowd party last night at Georgetown’s intimidatingly large, old but modernly redone Halcyon House.
Across the wall well above the stage was a projected image of script reading “we live in financial times. . .” The host for the evening was the uber-connected and politically ambidextrous Chrystia Freeland, US Managing Editor for the FT. And the featured draw for the night was General Electric CEO Jeff Immelt, who today just announced that he is waiving about $12 million in bonuses he could otherwise draw on.
His sober message last evening about the state of the economy and our challenges ahead — and the conversation that newsletter pamphleteer Chris Nelson, MSNBC’s Chris Matthews and I had with Immelt after his talk — might have had some effect on his decision to make this symbolic, but costly, move — though given the press releases that were out early this a.m. on the waved bonus, we were probably all irrelevant.
Despite the dazzle of the affair and an oyster shucker who shucked an incredible number of oysters for those who couldn’t stay away from his table, Chrystia Freeland set a tone for the evening that was pretty no-nonsense. She told it as it was and that the United States in all its parts, businesses, workers, finance, and thus who work in the public policy sector have a huge struggle ahead given the lack of traction the Obama team has gotten so far with its early economy-salvaging moves.
Jeff Immelt went a step further than Freeland and said that in the 1990s, “anyone could have run GE and done well.” Someone call Jack Welch. He went even a step further and said “not only could anyone have run GE in the 1990s, his dog could have run a GE, a German Shepherd could have run GE. . .” But he said that today, this is a different game. Immelt emphasized that what lies ahead “will be really, really, really hard.”
Immelt told the crowd that he thought America had to direct its resources and energies to focus on big leaps in “clean energy, health care, and education” and that we had to reintroduce a commitment to manufacturing and technological innovation and investment. He said that if we did not put these agenda items front and forward, then there would be no stomach for globalization among Americans.
Revealing the not surprising fact that he was a Republican who believed in globalization and trade, he said if “I went out with a globalization agenda today in this climate, globalization would lose 70-30.” Immelt said that we have to change the facts on the ground for Americans and reinvest in this economy in real ways — “particularly in technology, particularly in manufacturing” — before we can shove more globalization at our workers and citizens.
Among those in the crowd were the Washington Post’s Bob Woodward, Bloomberg and The Week‘s Margaret Carlson, former chief MSNBC election coverage producer Tamara Haddad, investor Mark Ein, New America Foundation Middle East Task Force Director Daniel Levy, Financial Times columnist Martin Wolf (with a piece out today that says that the American economy is today where Japan was in 1991), National Journal publisher John Fox Sullivan, MSNBC’s Chris Matthews, Republican anti-tax strategist Grover Norquist, financial markets expert and New America Foundation Global Strategic Finance Initiative Director Douglas Rediker, poll guru and Cook Report proprietor Charlie Cook, Financial Times writers Edward Luce, Daniel Dombey, Demetri Sevastupolu, Jurek Martin, Krishna Guha, Tom Brathwaite, and others.
Kudos to Chrystia Freeland, Edward Luce and their teams in DC and NY for first rate journalism — which I hope they are able to smartly sustain during grinding economic conditions.
— Steve Clemons


12 comments on “Financial Times: The Worst of Times?

  1. Christian Sporleder says:

    I hate to be cynical about your man Immelt but let me be for a minute.
    Since he began managing GE in 2001, Immelt has presided over a 68% decline in the share price, while taking out 72 million in compensation up to 2007. So don’t feel sorry for him yet.
    The fact that under Immelt GE has over-relied on GE Capital for profits (up to half total). Now that the retreating tide in the credit markets has exposed GE’s position they’ve had to go to the federal government to insure up to 139 million in debt,and shockingly its AAA credit rating was in serious danger this year. They’ve gone to the feds to be classed a bank under TARP, they got themselves under the incredibly stupid (not the naked part) short-selling ban. Legendary boss (deservedly or not) Jack Welch has been quoted grumbling on the record. And some analysts have questioned GE’s actual viabilty at this point. The link is a must-read—-
    All of these facts would seem to require this gesture as a bare minimum to both placate shareholders and avoid headlines suggesting another case of Lehman-type story of privatized profits, socialized risk
    As for his comments about Welch management, and dogs, remember that Welch was quoted earlier this year as saying Immelt had a credibility issue and that he’d want to shoot him if he didn’t deliver on his promises, so there’s a back story to this comment.
    Via a friend, I had a view of senior officers’ cult of management that Welch’s GE developed (so lovingly spoofed in 30 Rock). And while its true that Jack seemed to start believe he was the guy on the magazine covers, and entitled to pre-revolutionary France levels of compensation, he did take a moribound company and transform most of its operations, as did his other managers, and not always during a boom. I remember being astounded at how they turned the time it took to get appliances produced from weeks to days during the early nineties downturn. Now Immelt is trying to sell that division and can’t even find a buyer.
    Maybe the last laugh is on Welch, since he managed to play almost all of his senior management like fiddles, leading most of them to pass on endless calls to take over other Amerian blue chips believing they were in the running for succession over the course of a decade and more. Then he turned around and chose Immelt, at 45 almost a career generation below the other candidates.
    As for his complaints about public appetite for globalization, all I can think of is the Guardian’s excellent reporting these last few weeks on the shockingly low effective tax rates on so many large, well-known international corporations, due to the exploding industry of ofshore shell companies and other tax avoidance scams that have removed them from having any meaningful share of the public burden in any state. Freedom, responsibility, etc. etc.


  2. TonyForesta says:

    The more I examine this crisis, and this is opinion is validified by the recent NOVA documentary “Inside the Meltdown”, and numerous writings and reportage globally – the more I am convinced that the economic crisis an intentional wellplanned very pernicious machination targeting the American people, democratic leadership, and the Obama administration who dared to challenge the bushgovs lurch into unitary government. Oligarchy! Totalitarian dictatorship wherein the predator class alone benefits and is shielded and every other American and every other nation is attacked, injured, and conquered.
    Something is rotten in the land of OZ!
    Predator class heads must roll. Those responsible for this crisis must be held accountable.
    All the message-force multipliers and bushgov disinformation warriors who were bruting the naked lies of sound economic models, and normal market swings and cycles, and the patent lies of the bottom of the housing crisis or the stability of the markets in November of 2008 must be REMOVED and REPLACED! They FAILED, must be held accountable for that failure, and be replaced, and damned. Marked, branded if I had any say as thieves, reprobates, and enemies and dire threats to the best interests of poor and middle class Americans.


  3. vachon says:

    I watch Scarborough as often as I can (usually on a VCR at night) and find regular guest Chrystia Freeland unimaginative and mealy mouthed. If she has had an original idea, I haven’t heard it.


  4. WigWag says:

    “Jeff Immelt went a step further than Freeland and said that in the 1990s, “anyone could have run GE and done well.” Someone call Jack Welch.”
    The damage done to the United States by Jack Welsh is real and enduring. Not only did his philosophy that if he didn’t “fire someone every week he wasn’t doing his job” set the tone for greed and avarice that defined US culture for the last 20 years of the 20th century, his role at NBC was especially destructive.
    It was Welsh who gave us an airhead as anchor of Nightly News, Brian Williams. It was Welsh who brought the sexist buffoon Chris Mathews to prominence and it was Welsh who stocked MSNBC and CNBC with sycophants such as David Shuster, Mike Barnacle and Charlie Gasparino. We can also thank Welsh for giving us the one journalist who did more to dumb down the national conversation in the United States than any other, the late Tim Russert. To this day many Americans can’t distinguish heat from light when they listen to political discussions; no one is more to blame for this than Russert. Welsh gave us Russert.
    Welsh is a conservative Republican who reportedly sat off camera on election night in 2000 rooting for Bush and ridiculing Kerry. Supposedly he even made suggestions about what NBC correspondents should say. In all of this he was assisted by lackey in chief, the former Chairman of NBC, Bob Wright. To this day, Welsh is a fixture on NBC, MSNBC and CNBC.
    It’s too bad Immelt didn’t say anything about the Welsh retirement package that was so lavish that it materially affected a company even as large as General Electric and was so inappropriate that when word got out it had to be dramatically diminished in scope.
    The greed of corporate America, the vigor with which it fought reasonable regulation and the shenanigans that led to the current economic collapse are all perfectly exemplified by Jack Welsh.
    No wonder Immelt dissed Jack Welsh. After all, he’s the one who has to clean up the Welsh’s mess.


  5. TonyForesta says:

    Pain is inevitable. The financial system is far too corrupt, to onesided overtly favoring the predator class, to underregulated and under reviewed, and to rooted in deeply flawed and failed models. The critical questions now are how equitably that pain is distributed through out the global economy and particularly throughout the US. Heaping all the imponderable debts, deficits, and monsterous costs on poor and middle class Americans’s, and bailing out, or pouring trillions of taxpayer dollars into FAILED banks whose FAILED management funnel billions of those trillions of taxpayer dollars into their offshore accounts is a recipe for disaster. The end of that road, is bankers heads on spikes.
    The pain must be distributed EQUITABLY. The predator class must pay their fair share, and give back much of thier ill-gotten booty.
    Regulation must be put in place and ferociously enforced, with punishing fines and long jail terms for offenders and abuses. Industries and most particularly the sharks and oligarchs finance sector do not conduct thier bussiness in goodfaith. If fact if left to their own devises, as the last eight years prove – industries, and particularly the sharks and oligarchs in the finance sector repeatedly resort to malfeasance, perfidy, deception, cronyism, collusion, graft, and other criminal behaviors to pillage and then shield imponderable wealth.
    Industries, and particularly the sharks and oligarchs in the finance sector must be FORCED by government strict and punishing enforcement policies to play fair, account properly and with transparency, abide by the law, and prohibited from robbing and disadvantaging poor and middle class Americans to feed the superrich, – the predator class, and funnelling imponderable wealth offshore and offsheet.
    JOBS! A massive increase in real jobs, (not $10.00 an hour service slave wages) is the only way out for American. There will be no lending to people with no jobs. Demand for goods and services are radically reduced in direct proportion to unemployment. Reduction in demand for goods and services leads to layoff, which means unemployment and further decreasing demand for goods and services. It’s a death spiral.
    America’s poor and middle class must be put back to work in the green technology industries of future. Failure to provide American jobs, and no amount of purchasing of toxic products or improving the credit markets, or bailing out of FAILED banks will stem the inevitable collapse. Jobs and meaningful, well paying jobs with labor bargaining power, and labor rights, and tight regulation on industries to prevent and prohibit abuse, represent the only hope for righting the goodship America.
    If not, we sink and many of us will drown.


  6. John B. says:

    The statement by Immelt that a dog could have run a fortune 550 company in the 1990’s implies that there is no connection to the then and the now; and unfortunetely I just can’t see it that way.


  7. jonst says:

    “”I went out with a globalization agenda today in this climate, globalization would lose 70-30.” And what would the vote have been in the 90s? My bet is 60-40 against. Americans, for the most part, were always against what he calls “globalization”. It made no difference then, it will make no difference now. This is not to say that Americans should, or should not be, “against globalization”. Only that their opinion matters little when it comes to this stuff. See “Fast Track” games.
    “Globalization” is geared to a particular class whose skill set allowed them to do business, or work a profession, around the world. And those are the people that run the show.
    By the way…would have liked to ask Immelt if the “dog” would have turned one of the most sucessful and innovative manufacturing companies into a rather unsuccessful financial services company?


  8. JohnH says:

    It’s good to know that the Great Gatsby is alive and well and living it up at Halcyon House.
    Never mind us.
    Party on!


  9. Cee says:

    I suppose Catherine Austin Fitts wasn’t there


  10. steve clemons says:

    Helena – great catch! Thank you, he says sheepishly,


  11. Helena Cobban says:

    Fun and informative post, as usual, Steve. However, I imagine he was waiving his bonus rather than “waving” it?


  12. jurek martin says:

    Stevem thanks for drawing attention to the loss of Demetri’s job. Ni idea why were doing it, apart from money, but every bit of criticism helps. I don’t know the guy in Afghanistan but he surely had a great Weekend Front last Saturday. No need to reply, unless by cleft stick and runner, as am leaving for Soiuth Africa in a couple of hours. all the best Jurek


Add your comment

Your email address will not be published. Required fields are marked *