Tom Borelli

The politics of business is getting perilous for CEOs trying to traverse the ideological battle between capitalism and socialism.

Whole Foods CEO John Mackey is under fire for offering free-market solutions to health care while GE CEO Jeff Immelt is benefiting from adopting a strategy in which the government is his partner.

Indeed, the contrasting approaches to Obama’s political agenda offered by Mackey and Immelt illustrate the risks and benefits of dealing with the president’s statist policies.

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Whole Foods – the organic grocery retailer – is in the midst of a public relations crisis stemming from a commentary on health care reform by Mackey.

In his strongly worded opinion piece, “The Whole Foods Alternative to ObamaCare,” published in the Wall Street Journal, Mackey rejects Obama’s proposal because it would result in “a massive new health-care entitlement that will create hundreds of billions of dollars of new unfunded deficits and move us much closer to a government takeover of our health-care system.”

As an alternative, Mackey recommends a series of free-market ideas, including high-deductible health insurance plans and health savings accounts (HSAs), which his company has adopted.

Mackey also seeks to reduce health care demand by encouraging personal responsibility, “with the realization that every American adult is responsible for his or her own health.”

Mackey’s push for personal responsibility and a free-market solution is not an altruist endeavor, but good business. Mackey built Whole Foods by capitalizing on consumers seeking healthier food, and now he senses another opportunity: in this case, the opportunity to profit from selling foods that help combat obesity and chronic diseases.

Prior to the publication of his commentary, Mackey told the Wall Street Journal he wants the company “to encourage customers and employees to attack the nation's obesity rate, the prevalence of heart disease, diabetes and cancer.”

He envisions meeting that goal by increasing his company’s offering of healthy foods and to educate consumers on having better diets by initiating a Healthy Eating Education program in his stores.

Obviously, this business model could prosper under policies that encourage individual incentives to improve diets.

Mackey’s views spurred outrage among Obama’s left-wing supporters. A Facebook group dedicated to boycotting Whole Foods was created in record time, numerous blogs railed against Mackey and there were protests outside stores in several locations.

With Mackey on the ropes, a union pension fund advocacy group is calling for Whole Foods’ board of directors to dismiss him from the company he founded.

Although Mackey is far from a right-winger, his free-market view of health care and labor made him a target of Obama’s supporters.

In contrast, GE’s Immelt is “all in” with Obama’s policy agenda and it’s paying off handsomely.

Immelt embraces the notion of a new era of capitalism where companies coordinate their efforts with the government. In a speech to the Detroit Economic Club in June, Immelt said, “We should welcome the government as a catalyst for leadership and change.” He added, “America should get busy addressing the two biggest global challenges – clean energy and affordable health care.”

Immelt is doing more than echoing Obama’s campaign rhetoric of “change”: He has GE actively advancing the president’s policies, especially cap-and-trade.

Through its participation in the United States Climate Action Partnership – a cap-and-trade lobbying group – GE helped push the Waxman-Markey bill over the goal line in the House of Representatives. In doing so, the company was able to load the bill with provisions that will boost GE’s sales in “clean energy” products.

Even more disturbing, if true, GE’s support of Obama may have positively influenced the terms of a settlement with the Securities and Exchange Commission (SEC) over allegations the company was “cooking the books” to meet quarterly earnings expectations.

For a mere $50 million, GE settled four instances of accounting irregularities including engineering fake sales of locomotives to accelerate end-of-year earnings.

Following Enron, Sarbanes-Oxley and concerns of Wall Street greed, it’s amazing that GE escaped stiffer penalties from the SEC and show trial inquiries from the anti-business Congress.

But then again, Immelt is on Obama’s Economic Recovery Advisory Board and the last thing the president needs is to draw public attention to the possibility that a Bernie Madoff-type CEO serves as a presidential adviser.

Unfortunately, it appears that CEOs whose business strategies are in sync with Obama’s calls for greater government control will be rewarded while those who confront Obama’s plans for America will be punished.

This observation may explain why drug companies are lining up to cut a deal with Obama on health care and energy and utility companies are cutting deals with Congress on cap-and-trade.

Because of the critical role corporations play in public policy, liberty-minded citizens need to be willing to engage CEOs as they do elected officials. Participation at shareholder meetings and tea party rallies at corporate headquarters should be on the agenda.

Otherwise, business leaders will take the path of least resistance. They will join Obama and selling all of us out.


Tom Borelli

Tom Borelli, Ph.D., is a Senior Fellow with FreedomWorks.

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