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Immelt: ‘Our job is to make our ideas his ideas’

By Ezra Klein,

I’m in Cleveland right now for the Cleveland Clinic’s annual innovation summit. Last night, Jeffrey Immelt, CEO of General Electric and chairman of President Obama’s Council on Jobs and Competitiveness, delivered the keynote and sat for a Q&A. My notes on his talk:

- Immelt likes equations almost as much as I like graphs. For health care, it’s “cost = usage x price(inflation).” Implication: To tackle cost, you either need to get usage down, by making people healthier or restricting access, or get prices down, either through price controls or innovation.

- Business types really hate Barack Obama. Everybody sort of knows that, but it’s hard to get a sense of it if you’re not in the room listening to them laugh bitterly at questions like, “Does Obama understand the damage regulations are doing to business?”

- In fact, this audience is so down on Obama that Immelt, who you have to assume is one of the more pro-Obama CEOs out there, is not willing to defend him or his policies before this audience. At all. Even a little. His only comment is that people need to roll up their sleeves and help rather than complain. And his answers to Maria Bartiromo’s questioning slyly suggest sympathy with the audience. Asked by Bartiromo how he’ll make the White House listen to him and the business community, his answer, with a smile, is “repetition.” Everyone laughs. “Our job is to make our ideas his ideas,” Immelt says.

- This is the sort of audience that makes you think the White House is going to have a lot of trouble meeting its fundraising goals next year.

- “When you criticize Wall Street, they don’t care. You’re hurting the guy in Illinois who wants to build a factory.”

- I should say that this is more a comment on the conference and some of the other panels than on Immelt himself, but these folks really, really feel persecuted and unappreciated. The common response to this, of course, is that corporate profits have hit record levels in recent years and the top 1 percent has never been richer. But if you need more evidence that money doesn’t buy happiness, you should sit with some CEOs for an hour.

- “75 percent of the health-care dollar is in chronic disease. This is where the neat innovations will happen.”

- People here really don’t like the FDA, either. Interestingly, they keep comparing with to the equivalent regulators in Europe and Canada, who they say move much faster. An FDA employee I speak with later agrees that his counterparts in Europe move much faster. The American people have to decide how stringent they want the FDA’s standards to be, he explains. I haven’t looked into this enough to have a strong opinion, but to my knowledge, Canadians aren’t dropping like flies because their drugs aren’t sufficiently tested, are they?

- “The U.S. is historically where all the medical innovation has taken place. But with budget cuts and changes at the FDA, that’s no longer true.”

- Everyone wants to cut government spending. No one wants to cut the government spending they benefit from. This crowd agrees the budget is out of control but strongly opposes cuts to the National Institutes of Health and Medicare providers.

- “Everyone in this room should spend a week in India. Even more so than in China.” What India has, Immelt says, is a health-care sector with no insurance system to speak of and thus a strong market incentive for innovations that make health-care services radically cheaper. Smart companies will watch those innovations, he says, and bring them back here. Also, “there are not as many lawyers in India.”

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