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Tom and I 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 book examines the impact of one of the United States’ most powerful chief executives, Jack Welch of General Electric (GE).

The author chronicles Welch’s aggressive measures to increase profits, which included eliminating hundreds of thousands of jobs, resulting in the decline of the manufacturing sector and the destabilization of the middle class. Welch’s focus on downsizing, with a goal of cutting 10% of employees annually, transformed GE and inspired other companies worldwide to adopt similar strategies.

Gelles demonstrates how Welch’s emphasis on increasing shareholder value at any cost—through layoffs, outsourcing, offshoring, acquisitions, and buybacks—became the prevailing norm in American business. This approach has led to significant socioeconomic inequality and has harmed the very companies that embraced it.

Gelles highlights the transformation of companies like Boeing, Home Depot, Kraft Heinz, and more, as they followed in Welch’s footsteps. However, he also explores the current shift taking place in corporate America, where companies and leaders are rejecting the Welchism philosophy and proving that success can be achieved without sacrificing livelihoods, devastating communities, and disregarding regulation.

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