The New York Times had an excellent story this weekend on Anita Dunn, the Obama adviser who’s got one foot in the private sector and one in his presidential campaign:
And working on behalf of Pratt & Whitney, a military contractor, SKDK told other consultants that the administration appeared unwilling to move aggressively to kill a deal forcing the company to share a multibillion-dollar jet engine contract with General Electric, several participants said.
Among its biggest assignments was representing a business coalition seeking to reduce tax rates on about $1 trillion in offshore earnings. Ms. Rosen told members of the corporate team that the Treasury Department was unwilling to go to bat for the idea, one participant recalled. SKDK and several senior Treasury officials say they never discussed the issue.
But an official with knowledge of the issue said Ms. Rosen had spoken by phone with Jake Siewert, then a senior adviser to Treasury Secretary Timothy F. Geithner, asking whether there was any chance that the administration would allow such a plan to be included in a debt deal then under discussion.
“Revolving door” doesn’t quite capture the conflicts here.
— I never thought the government would be able to get it together enough to quit incentivizing leverage via the tax code. But Steven Sloan (a friend of mine) and Anna Palmer report for Politico that big business lobbyists think there’s at least something of a chance that the interest-expense tax deduction might be on the table in any major tax reform after the election:
A serious effort to repeal the deduction “would take up 100 percent of our focus,” said one banker.
Interest expenses topped $14 billion at General Electric in 2011, driven mostly by the company’s financial services unit. JPMorgan Chase reported $13.6 billion last year, while Hewlett-Packard paid $695 million.
The companies were able to deduct almost all of that cost to help their bottom lines…
The deduction is criticized for giving companies an incentive to become overleveraged, exacerbating economic downturns as debt-burdened companies quickly tumble into bankruptcy.
— Tom O’Boyle of the Pittsburgh Post-Gazette, who wrote a negative book about GE’s Jack Welch back in the late 1990s, writes about the former CEO’s conspiracy theory on the jobs report:
Although Jack Welch was the epitome of the modern celebrity CEO, his greatest genius wasn’t in reading a balance sheet or executing a business strategy, but rather in his preternatural understanding of raw power. He knew how to ingratiate as well as intimidate the media — to squelch, kill or chill unflattering portrayals of him. That meant rewarding allies and punishing potential adversaries.
During the six years I researched and wrote a book about Mr. Welch back in the 1990s, his high-powered legal team threatened to sue me and my publisher (Alfred Knopf) no less than a dozen times, though they never did. My offense: having the audacity to question the well-spun Welch myth, which publications like Fortune, Business Week and even my own Wall Street Journal were all too willing to convey.
At the same time, Mr. Welch courted allies with great zeal, among them Fortune. Little wonder then that when the magazine gave out its millennial awards back in 2000, none other than Jack Welch was declared “Manager of the Century.” No, not men like Henry Ford or either of the Watsons of IBM fame, who would have been obvious and logical choices.
O’Boyle picks apart Welch’s legacy, which involved turning GE into a too big to fail bank, one that almost failed in the crisis, with a manufacturing operation attached to it.
(h/t Chris Roush)