Relative Lack Of Domestic Firm Cheerleading Is Part Of What Makes America Great

Jeffrey Immelt says:

I want you to root for me. Look, every one in Germany roots for Siemens, everyone in Japan roots for Toshiba, everyone in China roots for China South Rail, I want you to say, win GE.

See Paul Krugman for a refutation of the idea that sad CEO feelings are at the root of our problems.

I would add, though, that I think Immelt is correct to say that foreign governments and political cultures tend to be more biased in favor of domestically domiciled firms than is the United States. This is in part because foreign economies are much smaller than the American economy. Nokia, particularly at its height, was an unimaginably big deal relative to the Finnish economy compared to any American firm is compared to the United States. But our relative lack of political and cultural bias in favor of domestically domiciled firms is one of the strengths of our country. After all, sitting around and hoping that your domestically domiciled firms do better than their competitors isn’t a growth strategy — it’s just a kind of fandom. If you try to put policy meat on the sentimental bones, all you wind up doing is subsidizing incumbents at the expense of new entrants. Or else you end up exacerbating existing imbalances in the economy.

These things can have longstanding consequences. The original version of Immeltism was “what’s good for GM is good for America.” And at the time, the US was a net exporter of both petroleum and automobiles. This helped inspire us to adopt a set of domestic industrial policies geared around promoting consumption of petroleum and automobiles. And now we’re largely still stuck with those policies even as we’ve become an importer of both goods.