Founded by Edison to bring electric light to the world, General Electric became America's most valuable company by 2001 before losing 90% of its value in one of corporate history's greatest collapses.

William Cohan's Power Failure transforms this collapse into a Shakespearean tragedy about corporate culture and American capitalism. From Edison's first light bulbs to Jeff Immelt's desperate final days, Cohan shows how the company that literally illuminated America became "a huge unregulated bank with a light-bulb logo."

The result is equal parts invention history, boardroom knife-fight, and forensic accounting thriller. Here are my favorite ideas of this 700-page tome.

1. The Cult of the Imperial CEO

GE didn't just have CEOs; it had demigods. The company ran on blind faith that the right leader could bend markets and reality itself.

The mythology started with Edison but peaked with Jack Welch, who ruled for 20 years like a corporate Caesar. When Welch chose Jeff Immelt as his successor in 2001, he literally wept at his retirement party—not from sentiment, but from doubt about his successor. Years later, dying of renal failure, Welch sobbed to Cohan: "I fucked up. And I don't know why."

The succession battles were blood sport. When Steve Bolze tried to position himself as Immelt's heir, board members invoked Emerson: "When you strike at a king, you must kill him." He didn't, and was gone within months. The board itself cowered before these imperial CEOs.

Key Quotes

• "This was American capitalism. GE was America."
• "Jeff has the unfortunate task of following a legend. It's like being a baseball player and following Babe Ruth." - Jack Welch, 2001
• "I haven't had a bad day in 20 years." - Welch, whose actual days included criminal price-fixing trials and a record EPA Superfund cleanup

2. The Devil's Bargain of Financialization

Another gripping part of Cohan's narrative is watching GE transform from making innovative, physical goods to a high-flying hedge fund.

Under Welch, GE Capital went from financing refrigerator sales to becoming one of America's largest financial institutions. By 2007, it had $600 billion in assets, was America's biggest issuer of commercial paper, and needed to roll over $90 billion every 90 days just to stay alive. It owned radio stations in Sweden, real estate in Japan, and a massive number subprime mortgages.

This worked spectacularly for decades. GE could raise cheap short-term debt because of its triple-A rating. It would borrow this money to make higher-interest long-term loans and called it "industrial earnings." Wall Street loved it because GE could always find an extra penny of earnings by selling some financial asset at quarter's end.

Then the Global Financial Crisis hit in 2008 and the commercial paper market froze. GE was 48 hours from bankruptcy. Only Warren Buffett's $3 billion injection and an FDIC guarantee saved them. The "House of Magic" was revealed as a house of cards.

Key Quotes

• "If you have cash, you own the world." - Welch justifying the RCA acquisition
• "GE resembled the failed conglomerates of yesteryear—Gulf + Western with better PR." - Bill Gross
• "We are going to be the Walmart of financial services." - Gary Wendt, GE Capital CEO (Walmart never needed FDIC backing)

3. How "Making Your Numbers" Became a Religion

Perhaps no section of the book is more damning than a forensic examination of GE's accounting. For 80 straight quarters GE met or beat earnings estimates. Cohan covers the methods that GE developed over 20 years:

• Cookie Jar Reserves: Overstate costs when acquiring companies, then "release" the excess later as profit
• Gain on Sale Accounting: Sell a power plant to a customer, book future service contracts as immediate profit
• The Insurance Time Bomb: Underpricing long-term care insurance in the 1990s created a $15 billion hole that exploded in 2017
• Immelt's "13 Cents": The infamous quarter where GE reported exactly 13 cents per share—what analysts expected—despite massive business headwinds. The SEC later found problems

By 2018, new CEO John Flannery discovered a $43 billion "hole" in the company's accounts. Decades of aggressive accounting compounded into a disaster.

Key Quotes

• "Deliver the earnings you promised, every time. No matter what."
• "Success theater was a key reason why expectations never reset." - Bernstein Research
• "We bent the accounting rules like a pretzel." - Former GE executive

4. Too Big to Manage, Too Proud to Fail

By 2017, GE made everything from MRI machines to wind turbines, owned media companies and oil services firms, financed Thai auto loans and American credit cards. The company operated across 180 countries and its annual report was 246 pages long. Its own board members admitted they couldn't understand it.

The complexity let management hide problems in one division with profits from another. It made the company impossible for outsiders to analyze. As one director told Cohan: "You're looking at eighteen businesses. If three are terrible and three are great, you can make the numbers work."

But complexity has a cost when multiple things collapse at once. The power business cratered in 2017 and the insurance liabilities exploded and oil prices collapsed. CEO John Flannery launched "Project Eisenhower," a secret plan to break up the company. His successor, Larry Culp, made it official: After 126 years, the conglomerate would split into three.

5. The Human Wreckage

The book's shows the human cost of corporate mythology. For example:

• 300,000 jobs eliminated over two decades
• Retirees who worked 40 years saw pensions cut and healthcare eliminated
• Entire cities hollowed out like Schenectady, Louisville, and Fort Wayne
• Investors lost $500 billion. This included everyone from pension funds to small shareholders who believed in the GE myth
• The executives themselves: Immelt aged 20 years in his last five. Flannery lasted 14 months. Board members faced lawsuits and public humiliation.

The final irony? The same GE labs that created the jet engine, the MRI, and LED lighting still exist. In 2024, they're developing hydrogen-powered aircraft engines and 3D-printing technology that would have amazed Edison. But the conglomerate that funded them is gone.

Why This Matters Now

Power Failure isn't just history. Today's tech giants are more valuable than GE ever was. They're more complex, more financialized, and their CEOs wield immense power.

The questions Cohan raises haunt every investor call:

• Can a company be "too big to manage"?
• When does financial engineering cross the line from clever to catastrophic?
• How much complexity can boards actually govern?
• What happens when the myth of the imperial CEO meets the reality of technological disruption?

As activist investor Ed Garden told GE's board: "This is the biggest failure of corporate governance in corporate history." He was talking about GE but you could imagine it applying to today's corporate tech giants if they're unable to adapt to AI, tariffs, and geopolitical uncertainty.

The book's final image is perfect. At Jack Welch's 2020 funeral, held at St. Patrick's Cathedral just before COVID shut down the world, the Old Guard of American capitalism gathered one last time. "It was the end of the 'baronial' era," Cohan writes, "both for GE and for the country itself."

Edison's light is still on. But the house he built has been sold for scrap.