GE as Poster Child of Crony Economics


Given how much of a story our governor made her chase after General Electric when it was planning its relocation from Connecticut, Rhode Islanders may be interested in Timothy Carney’s Washington Examiner piece, “The decline and fall of General Electric, the poster child of Obamanomics“:

There are countless explanations for GE’s collapse, but here’s one: GE spent a decade chasing the shiniest new winner picked by government, instead of looking for lasting value as dictated by the market. Government can provide billions in stimulus and maybe even some regulatory protection from your competition, but it can’t create wealth or provide lasting value.

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Business models that survive only when propped up by government aren’t a good bet.  There’s a reason they require government intervention, and government’s intentions can change.  The proper alignment is for government to reduce its interference so that it isn’t imposing undue burdens and then let market forces determine which direction companies go, motivated by the risk of their own resources.