Some Tweeters really are twits:
The conspiracy erupted after former General Electric CEO Jack Welch, a Republican, tweeted his skepticism five minutes after the Labor Department announced that the unemployment rate had fallen to 7.8 percent in September from 8.1 percent the month before.
"Unbelievable jobs numbers..these Chicago guys will do anything..can't debate so change numbers," Welch tweeted, referring to the site of Obama campaign headquarters.
I would say this idiotic conspiracy theory is merely election-year posturing. Then again, when you're personally responsible for the offshoring of thousands of U.S. jobs overseas, it may be hard to believe in a recovery:
Several years ago Jack Welch, former CEO of General Electric, captured the new reality when he talked of ideally having "every plant you own on a barge". The economic logic was that factories should float between countries to take advantage of lowest costs, be they due to under-valued exchange rates, low taxes, subsidies, or a surfeit of cheap labor. Globalization has made Welch's barge a reality. However, in doing so it has made capital mobility rather than country comparative advantage the engine of trade. And with that change, "free trade" increasingly trades jobs and promotes downward wage equalization.
Worse yet, capital mobility prompts countries to adopt unfair policies to increase their relative business attractiveness. These policies include disregard of environmental damage; suppression of labor to keep wages low; direct subsidies; and under-valued exchange rates. All are visible in China, which is the poster-child for such abuses.
A critical consequence of Welch's barge is the creation of a "corporation versus country" divide. Previously, when corporations were nationally based, profit maximization by business contributed to national economic success by ensuring efficient resource use. Today, corporations still maximize profits, but they do so from the standpoint of their global operations. Consequently, what is good for corporations may not be good for country.
Welch was so enamored of offshoring he developed a formula that (unfortunately) many other CEO's implemented:
No one is credited more than Jack Welch for popularizing outsourcing and offshoring (yes, it is not just offshoring and India). Remember his original formula - 70:70:70? That is 70% of all GE processes could be outsourced; 70% of all that could be outsourced could be offshored; and 70% of all that could be offshored could be offshored to India. The first 70% actually stood - or rather stands - for outsourcing. Like Moore's law in semiconductor, Welch's formula, by and large, is still valid as an end planning formula for large diversified corporations. As a philosophy, well, not so sure.
As a strategy, Jack Welch's rules of business - that held sway over corporate America for close to two decades - are increasingly being questioned. Why, Fortune did a cover story on it recently, calling it The New Rules. Fortune summed Welch's influence nicely.
"...Virtually everything Welch said became gospel - often to the extreme. When Welch embraced Six Sigma, the program began to proliferate all over corporate America. He talked about being the leanest and meanest and lowest-cost, and corporate America got out its ax. Welch advocated ranking your players and weeding out your weakest, and HR departments turned Darwinian."
We've met the enemy, and he is a twit.
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