Tuesday, January 25, 2011
Thomas Shevory, Ithaca College
President Obama recently visited a General Electric plant in Schenectady, New York. Schenectady, which was once known as the “electric city,” because it was the original home of GE, has fallen on hard times over the decades. More than once I have driven through it on my way to points north and have seen the huge empty parking lots that once held the vehicles of the plant’s employees.
The President seemed to have a number of purposes for the trip. He used it to announce that Jeffrey Emmelt, CEO of GE, would head up his Council on Jobs and Competitiveness. This move has been widely viewed as an offering to the business community which, for reasons that are not entirely clear, apparently believes that Obama has been hostile its interests. The President also wanted to feature GE as a company that has reverse-outsourced and brought employment back to the U.S. from overseas. He also wanted to showcase the vitality of the green economy. Specifically, the President visited GE’s new battery plant, which, when it goes into production later this year, will manufacture nickel-sodium batteries, the kind used in electric cars.
But how meaningful was the visit after all? New York Times columnist Paul Krugman was quite critical of the President, especially in terms of his invoking of the concept of “competitiveness” as the centerpiece of his economic policy. Krugman notes that, for all the talk of GE and American jobs, half of its workforce is overseas and more than half of its profits are derived from the financial sector.
On the other hand, I think it is significant that Obama went to a place like Schenectady. The last sitting President to drive through the city was John F. Kennedy. And the last President to speak there was Harry Truman (from the back of a train). It would impossible to imagine either of the Bushes going there, or even Clinton for that matter, all of whom focused their rhetoric and their policies on free trade, and none of whom seemed to care much at all about the manufacturing sector. In fact, there hasn’t been a President as interested in American manufacturing as Obama seems to be since Lyndon Johnson, or maybe Harry Truman. Whether interest gets translated into tangible policies is, however, another matter entirely.
Since the visit, the New York Times has reported that China is fast outstripping the capacity of American and European societies to invest in green and energy saving technologies. The GE plant seems like a pretty modest enterprise compared to the more than 50 billion dollars that the Chinese are now investing in that sector. The administration’s response has been to challenge the Chinese in international tribunals as in violation of free trade regimes. But this seems unlikely to have much effect. What the U.S. should be doing is actively investing in that sector. The GE battery plant, for example, was not simply a creature of the free market, but rather resulted from a partnership between the company and the state of New York.
It’s worth noting that the President did not take a trip down to the Hudson River while in the city. If he had, he would have been able to see the site of one of the worst freshwater chemical contaminations in American history. General Electric, in its previous incarnation as a “brown” industry, had dumped PCBs there over the course of many decades. The result was a 200 mile stretch of contamination. The company then spent years fighting New York and the EPA over a cleanup plan. The contamination itself would not, of course, have been visible, since it is covered by tons of water and muck, a legacy of America’s last industrial revolution.