The Export-Import Bank; Corporate Welfare for Business!
By Susan Steffen-Kraft
President Franklin D. Roosevelt was the very liberal president who started the Export-Import Bank in 1934 as a New Deal program to boost exports. The Export-Import Bank does not offer import assistance in the U.S. Instead, it gives loan guarantees, loans and insurance to help foreign companies and some of those have credit that is not so great. It helps these companies buy U.S. goods because private banks cannot or will not make loans to industries that include aerospace, energy and manufacturing because sometimes those companies have less-than-perfect credit.
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 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.
We know that Democrats vilify Wall Street banks and yet these same big banks make a profit off Ex-Im like few others, receiving billions in Ex-Im corporate welfare like few do. Of course, Wall Street’s big banks vigorously support Ex-Im because of course they have hardworking taxpayers to bail out any Wall Street losses. By voting for Ex-Im, Democrats are throwing Wall Street a big, wet kiss despite their vilification of Wall Street. A paradox, is what I am thinking. By the by, whatever you think of Senator Bernie Sanders he has taken a stand with many of the GOP who are against this. In both 2012 and 2015, he was the only Democratic Party-aligned lawmaker (although technically Independent/Socialist) in either congressional chamber who continued voting against the standalone re-authorization bills and he has not softened his rhetoric. “At a time when almost every major corporation in this country has shut down plants and outsourced millions of American jobs, we should not be providing corporate welfare to multi-national corporations through the Export-Import Bank," he commented after his June 2015 vote. I congratulate Bernie Sanders on his stand.
Ex-Im claims to be friendly to small business, but the money goes to Big Business. According to Veronique de Rugy of the Mercatus Center, between 2007 and 2013 the Bank subsidized $66.7 billion in sales by Boeing. Ex-Im also underwrote $8.3 billion for General Electric, $5.2 billion for Bechtel, $4.9 billion for Caterpillar and its subsidiary Solar Turbine, $3.2 billion for CBI Americas, $3.0 for Exxon Mobil, $2.1 billion for Applied Materials, $2.0 billion for Westinghouse, and $1.4 billion for Noble Drilling. During that period Boeing enjoyed 35 percent, GE 4.4 percent, and Bechtel 2.7 percent of the Bank’s largesse. In 2012, noted Timothy Carney of the Washington Examiner, the aircraft maker accounted for 83 percent of all loan guarantees.
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!"
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!"
The acting inspector general for Ex-Im has put in a report to Congress that there are active investigations into corruption and fraud at the bank and the number sits at 29. Think folks, 29 active investigations on this. The number could grow and I wonder how many acts of corruption and fraud there are that are not being investigated. Of course, the fact that bank employees have been caught accepting gifts, kickbacks and cash in exchange for directing taxpayer loans to specific companies should not be overlooked. They should be killing this program instead of renewing it all the time.
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.
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.
http://www.ibtimes.com/political-capital/bernie-sanders-gop-ally-opposing-export-import-bank-2125378, http://www.bloombergview.com/quicktake/u-s-export-import-bank, Financial Services Committee <fsc.gop.press@mail.house.gov>, https://www.quora.com/Who-owns-Emirates-Airlines, https://en.wikipedia.org/wiki/Emirates_(airline), http://www.washingtontimes.com/news/2015/jun/29/veronique-de-rugy-shut-down-export-import-bank/?page=all, http://www.zerohedge.com/news/2015-07-01/ex-im-bank-bites-dust-today-good-riddance-crony-capitalist-heist, http://www.cincinnati.com/story/opinion/contributors/2015/10/13/wenstrup-good-riddance-ex-bank/73858338/, http://wenstrup.house.gov/news/documentsingle.aspx?DocumentID=398999, PRESS RELEASE
October 27, 2015 from Rep. Jeb Hensarling Sent from the Committee on Financial Services
October 27, 2015 from Rep. Jeb Hensarling Sent from the Committee on Financial Services
RSS Feed