Power Failure: The Rise and Fall of an American Icon (Book Review)

Summary: Written by William D. Cohan, this book chronicles the birth and demise of General Electric. The author focuses specifically on the CEO administrations of Jack Welch and his successor, Jeff Immelt. GE was the premier American business model in the 20th century. With operations worldwide and a diverse line of operations and businesses, GE was a business powerhouse and the CEO title there was competitively sought.

This book read like a novel. Greed, hubris, deception, scandal, paybacks and crime were found at the highest ranks of the company. Did Jack Welch “cook the books” to satisfy his promise of reaching quarterly earning projections? It appears he did utilize assets from GE Capital when there were operation shortfalls. Welch laid off tens if not hundreds of thousands of employees. He closed business lines that had operated successfully for decades. Business operations, employees and products were chess pieces for GE CEOs.

Welch more than Immelt had the respect of GE employees and certainly senior management of the corporation. Welch personally managed the careers of many of the men who moved up in the organization. Welch also listened to objections to his thinking, something that Immelt refused to do.

Both Welch and Immelt made poor business decisions. There were businesses and companies that each man should not have merged with or purchased. Immelt generally did not solicit comments or potential objections from his senior officers before a major business decision. This was a major cause in his downfall and GE’s fortunes.

Welch was a complex figure. His loyalty to men who worked for him did not extend to women he married. He appeared to find solace with his third wife, Susie.

Cohan spent time within the book describing the personalities and lifestyles of not only Welch and Immelt but other men of ambition and power in the GE organization. How GE did or did not develop a succession plan for their next CEO is a topic worthy of study by MBA classes.

Rating: ★★★★★

One of the best business books that I have read.

Book Review: The Man Who Broke Capitalism: How Jack Welch Gutted the Heartland and Crushed the Soul of Corporate America—and How to Undo His Legacy by David Gelles

The Man Who Broke Capitalism: How Jack Welch Gutted the Heartland and Crushed the Soul of Corporate America—and How to Undo His Legacy by David Gelles

My rating: 5 of 5 stars

Best business related book that I have read this year…This book is an indictment of Jack Welch, “welchism” and capitalism in general. Jack Welch is not here to defend himself but the author presents a very compelling narrative supported by numbers that Welch was very overrated as a CEO, role model and strategist.

Welch quelched efforts at innovation, long term planning and corporate responsibility so he can meet or exceed quarterly numbers. Welch’s primary business objectives were to please his stockholders and become very personnaly wealthy.

Very well written book. Interesting stories and business analysis…Good investment of my book purchase…

Notes from the book:

Welch employed three main tools in his crusade: downsizing, dealmaking, and financialization.

Welch developed a new policy, colloquially known as “rank and yank.” Each year, managers rated their employees. Those who were in the bottom 10 percent were let go.

GE stock fell 80 percent in the years after Welch retired, becoming the worst performer in the Dow Jones Industrial Average.

Welchism has at its heart the conviction that companies must prioritize profits for shareholders above all else, that executives are entitled to enormous wealth and minimal accountability, and that everyday employees deserve nothing more than their last paycheck.

From runaway climate change to steep inequality, to hollowed-out communities abandoned by companies seeking cheap labor elsewhere, it can at times seem like corporations do as much harm as they do good.

The chief executive of a major American company now makes in one year what it would take a typical worker in that company 320 years to earn.

Recommended Reading

The Biggest Bluff: How I Learned to Pay Attention, Master Myself and Win by Maria Konnikova (With help, a plan and a lot of preparation, a woman writer learns to play professional poker and beats the pros. Excellent psychological insights on mastering poker and life.True story!)

Three Ring Circus: Kobe, Shaq, Phil and the Crazy Years of the Lakers Dynasty by Jeff Pearlman (I really enjoy Pearlman’s sports books and this one is really good with a lot of interesting inside stories. You don’t have to be a Lakers fan to enjoy this book about a dysfunctional group of players and egos who manage to win world titles.)

Gods at Play: An Eyewitness Account of Great Moments in American Sports by Tom Callahan (Reporter’s memoir of covering great athletes like Muhammed Ali, Pete Rose, Oscar Robertson, Roberto Clemente, Arthur Ashe and others. His story about Bob Cousy and how Cousy took care of his sick wife was very moving.)

The Presidents vs. the Press: The Endless Battle Between the White House and the Media by Harold Holzer ( a very long book with interesting anecdotes of Presidents vs. the Press going back to Washington; chapter on Trump is very interesting):

Billion Dollar Loser: The Epic Rise and Spectacular Fall of Adam Neuman and WeWork by Reeves Wiedeman (business book that reads like a novel)

Epitaph by Maria Doris Russell (Historical novel about Wyatt Earp, Doc Holliday and Tombstone. Great read!)

2020: Winners and Losers

2020 has and continues to be a tumultous year politically, economically, financially and culturally. Here is a list of some winners and losers so far…



Jeff Bezos, Amazon CEO

Wall Street



Fake News



Mitch McConnell

Health Care and Essential Workers Covid Response

Dr. Jill Biden

Conspiracy theories

Philadelphia Union

Rudy Giuliani, Jerry Fallwell Jr.

Amazon warehouse workers

Main Street

AMC, Regal movie theaters

Commercial Real Estate



Planet Fitness, gyms

Donald Trump

U.S. Congress and Executive Branch Covid Response

Melania Trump


Philadelphia Eagles
2020 Winners and Losers

What You Don’t Know May Hurt You

Many experts, professionals and officials communicate in two ways. First, they tell you what they want you to know. Second, they don’t tell you or they lie and obfuscate what you need to know. The latter form of non-communication may be the most important as it often hides what is critical information regarding motive, fact and truth so you can respond accordingly.

The Myth of the Trump Economy

I think it’s time to put a pin in the Trump balloon about his success with the economy. He and his supporters have used the relatively good economic metrics that exist as rationale for his poor behavior as president and as the primary rationale for his reelection. Many Trumpers seem to think that Donald is a resurrection of FDR saving us from a depression or worse. I’m surprised that Trump did not take credit for the US Women’s Soccer Team In winning the World Cup.

Listed below are five considerations when viewing the economy:

#1 The unemployment rate is 3.5% which is excellent. There are more jobs than qualified people to fill them. I’m not quite sure what credit the president or Congress can take for that result. I’d give more credit to America’s entrepreneurs, small business owners and CEOs for the job success. Trump inherited a growing economy from the Obama administration. Trumpers need to remember that the unemployment rate went from 10% to 4.8% during Obama’s tenure. The fate of the economy was much more tenuous in 2009 when Obama assumed the presidency than it was on January 20, 2017. In addition, Obama did not have the favorable political environment where his party possessed the numbers or clout to push through his agenda or bidding, at will. Obama did the heavy lifting for the economy. Trump was the relief pitcher in the ninth inning protecting a 8-0 lead.

#2 The passage of the 2018 Corporate tax bill helped promote an increase in the Dow Jones industrial average by 49%. This is great metrics – – if you are fortunate enough to have invested in Dow Jones companies. So Trump and the Republican Congress made a decision – – they helped improve the fortunes of the large investors to buy new mansions, and new yachts. At whose expense? Our country badly needs improvements in our infrastructure – – we need to fix up roads, bridges, airports, etc. The federal debt has gone up $2 billion under Trump and is now 78% of this nation’s entire gross domestic product. The Republicans have approved the credit card  and issued an unlimited credit limit and our gleefully spending it. This is the party who wanted to cut up the card and freeze spending when the previous President was a Democrat. The problem is that the bill will be paid further down the road by future generations.

#3 The fed funds rate is 1.75%. Why is this important? For consumers, it affects the borrowing rate for your car, your mortgage and any other consumer debt that you may have. Currently, you are able to borrow money relatively cheaply. However, if you are interested in saving money, you are in a conundrum. Anyone who has a checking account, money market fund or certificate of deposit is probably realizing an annual rate of less than .05%. In order to make money or get the best return on your investment, you probably have to enter the financial casino known as the stock market or equities. One of the primary reasons why the Dow, S&P and NASDAQ have and continue to do well is that consumers are investing their money in stocks, bonds and mutual funds. There is no other game in town. If you are a retiree and on a fixed income, you will earn about as much money stuffing it under your mattress as you would depositing it in a bank. One last point, the president expressed he “could get used to” in a  negative interest rate environment. Under this scenario, depositors would pay banks to maintain their cash deposits. If the country enters a recession, the Fed has very few options to bolster the economy given the very low interest rates now. A negative interest rate environment is not impossible.

#4 Remember the President’s promise during the 2016 election to replace Obamacare with a better healthcare program that was cheaper and more efficient? I do. The only thing that the president and the Republican Party have tried to do is to eliminate Obamacare. You never heard what program they were proposing to a replace it. During the Trump administration, the number of people lacking health insurance rose by 2 million. Prescription costs continue to rise and many people each day struggle to gauge whether to eat or to use the money for drugs they need to stay alive or healthy.

#5 Strangely enough, there are consequences to a full employment economy. For this observation, I will speak from several recent personal experiences in trying to conduct business with various companies. First, due to the lack of attracting qualified applicants, many companies are forced to hire unqualified or less than qualified people. Many of these employees require extensive training and follow-up. Second, there is a huge turnover in personnel particularly among businesses that are unable to provide competitive salaries and benefits. In various instances, applicants who accept job offers don’t show up for their first day at work and don’t have the decency to notify the employer that they have accepted another position or simply lost interest in the job they accepted. Third, dealing with combination of unqualified and unmotivated employees is a horrible experience for those of us trying to conduct business with a company. Because many employees do not possess good business judgment or have the ability to resolve issues on their own, they are forced to follow a script. Beyond reading the script, many frontline employees are clueless in resolving billing, delivery and service issues.