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Business-Managed Democracy

“Business-managed democracies are those in which the political and cultural arrangements are managed in the interests of business”

Sharon Beder

Business-Managed Environment

GE Political Influence


GE has a permanent team of lobbyists in Washington. It also hires lawyers and lobbyists for particular projects. In 2011 it employed 179 lobbyists and 121 former government personnel, spent $36 million on lobbying (see graph below) and $ 1.7 million on political donations (see graph below). In its lobbying GE claims to represent the interests of millions of people—its employees, suppliers and customers—not to mention the public interest.

General Electric Annual Lobbying Spend and Political Donations

graph graph of contributions

Source: 'General Electric', OpenSecrets, 2012.

Although GE contributes to politicians from both political parties and its top executives include Democrats, GE is a staunch supporter of the Republican Party. It employed Ronald Reagan in 1954 “when his acting career was floundering,” giving him a TV career and sending him on a lecture circuit around the country pushing GE Ronald Reagancauses such as deregulation, lower corporate taxes, and attacking communism, labour unions and social welfare. This period working with GE in the 1950s and 60s marked the start of Ronald Reagan’s political career.


GE’s support of Reagan and the Republicans began to pay off in a big way after Reagan was elected president. He introduced tax cuts resulting in a windfall for GE. In the years 1981-83, GE made a profit of $6.5 billion but received a tax rebate of hundreds of millions of dollars!


Its tax burden went from $330 million a year to minus $90 million a year—money the government now owed GE. By rough estimate, the 1981 tax legislation yielded as much as $1.3 billion for General Electric over several years and probably much more in the long run...
GE’s windfall did not, however, create any new jobs for Americans. On the contrary, the company was in the process of drastically shrinking its US workforce—eliminating nearly fifty thousand people from its payroll through layoffs, attrition and the sell-off of subsidiaries. The tax windfall, however, did help GE finance its aggressive campaign of corporate acquisitions...


One of these occurred in 1986 when GE bought RCA, which owned the television network NBC, for $6.28 billion. A previous similar attempt by ITT to buy the ABC network (1966-7) had been prevented by the Justice Department after a public outcry on the grounds that it “could compromise the independence of the ABC’s news coverage of political events in countries where ITT has interests.” However, no such objection was made in the case of GE and the then US Attorney General later joined GE’s board of directors. Douglas Kellner, in his book on Television and the Crisis of Democracy argues:


The fact that this corporation—one of the major producers of nuclear weapons and energy, a top defense contractor, and a key player in the military-industrial complex....—was allowed to take over a major television network and use it to advance its corporate goals makes a mockery of the antitrust laws, the public utility status of broadcasting, and the federal regulatory apparatus.

Tax TableIn 2010 GE was still not paying taxes. The New York Times observed:


The company reported worldwide profits of $14.2 billion, and said $5.1 billion of the total came from its operations in the United States.
Its American tax bill? None. In fact, G.E. claimed a tax benefit of $3.2 billion... Its extraordinary success is based on an aggressive strategy that mixes fierce lobbying for tax breaks and innovative accounting that enables it to concentrate its profits offshore.

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