By: Timothy P. Carney
“So those who talk about ‘this is Big Government,’ ” Vice President Biden told a crowd at a General Electric factory in Kentucky, “this is Big Government giving a little bit of help to jump-start America to lead the world in the 21st century.”
Biden was at GE’s Appliance Park in Louisville, where a raft of government subsidies (and probably some gentle urging from the White House) has spurred the multinational conglomerate to begin manufacturing hybrid electric water heaters — part of the “new foundation for a new economy,” Biden said.
But later this month, 75 miles east, workers at GE’s Kentucky Glass Plant get to see the other side of Big Government. About 175 workers there make glass, which is shipped to the Winchester Bulb Plant. Winchester Bulb is being shut down in September, and so the Lexington Glass Plant will be shuttered in late July.
GE explained in a press release last year, “A variety of energy regulations that establish lighting efficiency standards are being implemented in the U.S. and other countries, in some cases this year, and will soon make the familiar lighting products produced at the Winchester Plant obsolete.”
These were “green” regulations that then-Sen. Obama supported in the 2007 energy bill — as did GE. The company, you see, makes more profit off the more efficient compact fluorescent bulbs, because the company can charge more, but also because it makes those bulbs in China, with cheaper labor costs and fewer environmental regulations.
So, Obama and GE teamed up, pushed Big Government environmental regs and killed nearly 500 jobs in Lexington, Winchester, and another glass factory in Niles, Ohio.
But don’t worry, Obama’s got an answer for these workers, too. Obama’s Labor Department this spring declared the plant an “adversely affected employer” under the 1974 Trade Act. It’s true imports are replacing the bulbs Lexington workers used to make, but the culprit isn’t free trade — it’s the light bulb law. And the imports are GE’s compact fluorescents.
Back to Louisville, where Biden is touting the benefits of Big Government, the picture is far murkier. It’s true Congress and the administration have opened the spout of corporate welfare for GE in order to keep jobs in Louisville: $24.8 million in “advanced manufacturing tax credits” from the stimulus, plus “[u]p to $17 million in incentives from the state and metro government” according to a GE press release.
These water heater jobs are largely replacing lost refrigerator jobs, which brings us back to Big Government, although Obama bears no blame in this one. In July 2000, the U.S. Export-Import Bank, a government agency, subsidized GE’s construction of a factory complex in Celaya, Mexico. That complex makes GE refrigerators — fridges that used to be made in the United States.
To be fair, the Ex-Im subsidy exported the jobs making high-end fridges, while Appliance Park made low-end fridges. So Ex-Im helped kill GE jobs in Bloomington, Ind., rather than in Lexington.
So Big Government policies are killing GE jobs that might thrive in the free market, while creating GE jobs that never would survive in a free market. Obama is replacing unsubsidized jobs with subsidized jobs.
Biden calls this “a new economy.” Obama calls it “remaking America.” GE Chief Executive Officer Jeff Immelt calls this relationship “capitalism … reset.” Immelt wrote to shareholders days after Obama’s inauguration, “The interaction between government and business will change forever. In a reset economy, the government will be a regulator; and also an industry policy champion, a financier, and a key partner.”
This partnership of Big Business and Big Government has been good for the workers in Appliance Park. It’s also helped GE shareholders and executives. Of course, Biden and the Democrats benefit by getting to take credit for new jobs.
But will Biden be in Lexington later this month, telling workers laid off because of environmental regulations that Big Government is for their own good?