Gelles’ premise is that it was Jack Welch who destroyed capitalism and the American Dream.  More likely, in my analysis, it was the fact that Jack Welch showed the way how Milton Friedman’s aberrant vision could be achieved that helped other firms (along with GE) to screw the American worker.

Jack was bound and determined to develop GE into the most valuable firm in the world.  And, to him, that meant pushing GE’s stock price as high as it could go- workers and consumers be damned.

To accomplish Friedman’s plan, Welch mastered the concept of “financialization”- he converted GE from the master industrial firm it was into an unregulated bank.  Sure, it was profitable in the short term, allowing GE’s stock price to continue its rise, but it ultimately destroyed the value of the firm.

What Jack Welch really did was effect layoffs, outsourced valuable jobs, acquired other firms, and bought back the corporate stock to keep the valuation where he wanted it to be.

And, with his blueprint (and acolytes everywhere), he afforded firms like Home Depot, Boeing, Heinz, even the supermarket Albertson’s to do the very same things.  In other words, he helped define the universalization of the Milton Friedman prescription.  Which meant worker wages stagnated, corporate executive pay skyrocketed, and inequality reigned everywhere.

How stark a change did Welch effect?  Well, in 1953, Philip Reed was the head of GE.  And, it expounded how important GE was to the US economy- by paying its workers fairly, dealing properly with suppliers- even how much taxes it paid to the US Treasury.

Three decades later, under Jack Welch,  GE espoused employee layoffs, closing of factories,  and using profits to aggrandize corporate executives and to effect stock buybacks.  In other words, proof that Milton Friedman’s concept [the social responsibility of business is to agglomerate profits] could and would change corporate America.

In the process, GE (and most of the rest of corporate America) underinvested in R&D and used acquisitions to fuel growth.  (GE, in particular, also manipulated its financial division to help depict profits that weren’t truly there.)

I admit to have been taken in by the Jack Welch process.  Until it was too late- when it was clear that wage inequality and the squelching of the American Dream had become endemic in America.

Over the past two years, there has been lip service to the changing mores of corporate America.  (I’ve reported those changes here. Both Laurence Fink  [BlackRock] and Jaime Diamond [JP Morgan Chase] have chimed in.)

But, the pandemic- which led to labor shortages and economic turmoil- has forced these changes to become more foundational and less window-dressing.

One can only hope that the social compact between business and its workers and the local community can be restored.