GOP block re-authorization of Export-Import bank kills jobs

[The Rabbi]

Do you understand the term "subsidy"?

I have to admit I don't think I've ever heard of the Import/Export Bank before. Plus, Tim Geither being in on it makes me suspicious to begin with.

Rabbi, how is it a "subsidy"? The Im-Ex Bank finances sales to foreign countries that other private banks don't wanna' take a risk on. (There's a reason for that)

From Wikipedia (yeah I know, you guys don't like wiki):
Export-Import Bank of the United States - Wikipedia, the free encyclopedia

The Bank has come under criticism for allegedly favoring special interests ahead of that of the U.S. taxpayer. These interests include that of heavily subsidized corporations such as Boeing or Enron as well as those of well-connected foreign governments and nationals (such as a 1996 $120 million low-interest loan to the China National Nuclear Power Corporation (CNNP)). The majority of loan guarantees over 2007 and 2008 went to companies purchasing Boeing aircraft.

I'm thinking that Tariffs would work better anyway. Just charge an amount on imports to make that item the same cost as a competing American Product. Gov't makes money hand over fist, Americans not shut out by cheap, slave labor goods.

You think Boeing doesn't have access to funding? Any time the government provides funds that banks wont they are subsidizing the market. I don't want the government subsidizing Boeing (which I think is the biggest beneficiary of the ExIm Bank). This is crony capitalism. Let them get their own damn loans.

 

[The Rabbi]

Review & Outlook: The Export Subsidy Boomerang - WSJ.com

If you thought Fannie Mae, Freddie Mac and Solyndra would teach Congress a lesson about politicized credit, think again. The federal Export-Import Bank is up for reauthorization, and the only question seems to be how much more taxpayer money Washington wants to put at risk. If the GOP wants to have a principled battle about fiscal waste and market distortions, this is a good one.

The ExIm Bank—founded in 1934 to support trade with the Soviet Union, but never mind—provides taxpayer-backed loan guarantees and other services to U.S. business, especially big exporters. The bank's renewable charter expired on September 30 and Congress has kept it alive through temporary spending bills.

Business lobbies claim the country can't afford to let the bank expire or—gasp—private banks like Citigroup and J.P. Morgan would have to do more trade financing. California Republican Gary Miller, supported by fellow Republican Spencer Bachus, Democrat Barney Frank and others, has a bill pending in the House to prolong the bank's life through 2015 and raise its lending cap to $160 billion from $100 billion. The House Financial Services Committee waved the bill through in a voice vote last year and it's likely to get a floor vote this month.

The issue deserves more public scrutiny, starting with the bank's mission. ExIm says it takes risks that private lenders are "unable or unwilling" to take. But in today's global capital markets, there are very few places (North Korea) where private banks are unable to function, which raises the question of why taxpayers should bear risks that private banks are unwilling to take. At the same time, ExIm also paints itself as a low-risk enterprise. It can't be both.


ExIm's defenders note it has returned money to the Treasury since 2008 and has a less than 2% historical default rate. But ExIm is essentially adopting the same strategy as the Federal Housing Administration: expanding its business, raking in more revenues and proclaiming that it's therefore lower-risk.

ExIm had a record year in 2011, doling out $32.7 billion in loans, guarantees and insurance. That's up from $24.5 billion in 2010 and $12.6 billion in 2007. Meanwhile, loss reserves have declined to $4.1 billion from $5.1 billion in 2010, or to 4.6% from 6.8% of total exposure.

The bigger issue is that the bank by its nature helps some companies at the expense of others. ExIm, for instance, helped its biggest client—Boeing—win airplane contracts in 2011 from Air China, Air India, Cathay Pacific and others. That's great for Boeing, which accounted for 45.6%, or $40.7 billion, of ExIm's total exposure in fiscal 2011.

But this subsidy means that foreign airlines can then buy newer aircraft more cheaply than their U.S. competitors. This gives them an advantage in the global air transportation market. In a letter to Congress last month, Delta estimated that ExIm cost the U.S. airline industry up to 7,500 jobs and $684 million a year.

ExIm Bank supporters play the patriotism card by suggesting that export subsidies help U.S. companies at the expense of foreigners, but in this case it helps foreign companies at the expense of American airlines.

ExIm distorts markets in other industries, too. The bank has an environmental export financing program that has backed the likes of Solyndra and Abound Solar. Think about that: The Department of Energy's loan program provided the start-up capital for those companies, and ExIm Bank provided financing for their customers. Solyndra is now bankrupt and Abound Solar has halted production.

More at the source

 

[Trajan]

GOP block re-authorization of Export-Import bank

You sure about that? Harry Reid hasn't done a budget in three years.

ROTFL. So according to you the Government hasn't spent any money in 3 years.. Come back when you are able to think for yourself instead of regurgitate stupid things people tell you

you are a nitwit...seriously, you know that, right?

 

[starcraftzzz]

You sure about that? Harry Reid hasn't done a budget in three years.

ROTFL. So according to you the Government hasn't spent any money in 3 years.. Come back when you are able to think for yourself instead of regurgitate stupid things people tell you

you are a nitwit...seriously, you know that, right?

Yes you not being able to form a coherent sentence is a reflection on me

 

[Trajan]

I rest my case.