The Export-Import Bank; Corporate Welfare for Business!
By Susan Steffen-Kraft
The Ex-Im bank says the default rate was less than 1 percent since 1934. However opponents have said that Ex-Im loans could be vulnerable in a downturn, leaving taxpayers stuck with the bill; and they have notated that the current low interest rates made it a good time to get rid of this institution though phasing it out.
The victims of these loans are the taxpayers who bear the brunt at this point of $140 billion in liabilities. This statement about the amount owed came in June 2015. I am sure it will only continue to grow now that it has been re-authorized. It also affects the taxpayers pocketbooks. We, as the consumer, pay a higher prices for the purchase of these subsidized goods. We are the victims of unsubsidized firms competing with subsidized ones.
Many are even victimized multiple times as taxpayers, consumers, competitors, and finally as a borrower. Sadly, we will never see the businesses that could have been because of the Ex-Im. We will never hear from the workers whose wages weren’t raised or whose jobs disappeared because of unfair competition from the Ex-Im backed firms. These victims matter and economists tell us that the cost to them is bigger than the benefits to the winners.
The following year just five firms collected 93 percent of the loan guarantees. Also in 2013 the top ten ExIm beneficiaries accounted for two-thirds of the Bank’s total activities: Boeing, General Electric, Bechtel, Applied Materials, Caterpillar, Space Systems/Loral, Komatsu America, Case New Holland, Ford, and Sikorsky Aircraft. Other frequent beneficiaries include Dow Chemical, John Deere, and Lockheed Martin".
As for the foreign companies; as an example, these state owned names to name a few are Pemex, the Mexican government’s oil and gas giant and Air Emirates, the airline which is owned by the Emirates group. The group is owned by the uncle of the current Prime Minister of UAE and the uncle's name is Ahmed bin Saeed Al Maktoum who is the head of the Civil Aviation of United Arab Emirates.
Naturally, Emirates has a high influence of the government in Dubai and should have plenty of money on it's own. Funny. how the Mid-East and the U. S. are so entangled in business and yet they are supposedly our enemies. Saudi has money in Fox news and Ex-Im loans to a Dubai government connected company. Better still, Emirates is in partnership with U.S. Airways. As I have always believed and stated, "Follow the money trail!"
When you realize that “the largest foreign companies and banks all get subsidies from U.S. ExIm, and China’s ExIm gets direct subsidies from U.S. Ex-Im.” This statement from Timothy Carney of the Washington Examiner. So we are helping China also in this way. As if that were not enough, Ex-Im is in danger of becoming another Enron. That company was mismanaged and there was lots of misconduct. Guess who gave them financing at one time? Why of course, it was Ex-Im.
Big Business enters into these games with the government which allies them with the government at the cost of stunted economic growth and anti-competitive directives. Having a fundamental tax reform and tort reform along with regulatory reform will help to strengthen our economy and help out small businesses and the business entrepreneurs that start and run them. Corporate welfare can not match that.
So ask yourself, where is the justice in lining the pockets of the elite who already have money? This could leave the taxpayer on the hook for billions in bad loans. There is no justice for doing so and there is no excuse for doing so.
October 27, 2015 from Rep. Jeb Hensarling Sent from the Committee on Financial Services