Cultural Limits posted: " Corporate slush fund...or necessary extra
Coming to you from the annals of "political controversies I didn't know I
was supposed to care about" is the question of whether or not to renew the
charter of the United States' Export-Import Bank. The Amer" Respond to
this post by replying above this line
New post on *Rat Nation*
<http://ratnation.me/author/mynewpolitics/> Political Hot Potato: The
Export-Import Bank
<http://ratnation.me/2014/09/01/political-hot-potato-the-export-import-bank/>
by
Cultural Limits <http://ratnation.me/author/mynewpolitics/>
[image: Export-Import-Bank-building]
<http://ratnation.me/2014/09/01/political-hot-potato-the-export-import-bank/export-import-bank-building/>
*Corporate slush fund...or necessary extra*
Coming to you from the annals of "political controversies I didn't know I
was supposed to care about" is the question of whether or not to renew the
charter of the United States' Export-Import Bank.
The American Export-Import Bank was originally chartered in 1934 to assist
American exporting companies in being competitive overseas. The best
explanation of the function of the entity comes from Dan Burrows from
InvestorPlace
<http://investorplace.com/2014/08/export-import-bank/#.VASgbTKwJR8>:
Founded in 1934, the federal credit agency provides loans, loan guarantees
and credit insurance to help U.S. companies export goods overseas. For
example, when a loan from a private bank can’t be lined up for commercial
or political reasons, the Export-Import bank could provide credit to a
foreign buyer of a U.S. product.
While that sounds rather archaic (it is, actually), what this does is
allows American products to be sold to buyers overseas by loaning the
BUYERS the cash that they otherwise would not be able to raise in order to
purchase American goods. The low-interest loans are paid down at a profit
for the government by the overseas entity. Some call that an effective
tariff, others call it corporate welfare, but what it seems to be more than
anything is an assurance of competitiveness of American companies overseas,
and somewhat of an efficient one at that.
*Yes, it messes with the free market concept, but American conservatives
seem to be the only ones willing to live by a strict free market rather
than playing with assisted market forces.*
Before going off on a tangent and spouting the line that Delta Airlines
sees Export-Import as a slush fund for Boeing since they eventually are the
beneficiaries of over 30% of the loans made, step back and consider who
could actually afford Boeing's products. In the USA, other than the
federal government and American and Southwest Airlines...no one. (Delta
has been buying AirBus planes, so maybe there is some sort of corporate
sour grapes here.) Boeing loses business and a whole lot of people lose
jobs (and benefits and retirement and...) especially since the Pentagon is
cutting back on purchasing military aircraft.
When considering the overall, cold hard facts of the Export-Import Bank,
the businesses involved as well as the rest of the world's position on such
entities, is killing off the surrogate to the golden geese of American
business such a good idea just because they have lobbying power and mingle
with whichever party is in charge this year for monetary advantage?
- Every industrialized country has an export-import bank to facilitate
the export of goods from the companies within their borders. Having such a
program is an offensive economic move.
- The Export-Import Bank is one of the few government programs that
gives or loans money out with a return on investment to the tune of over a
billion dollars last year.
- Easily recognizable companies that are able to export their goods
thanks to Export-Import other than Boeing are Caterpillar and General
Electric, among others. (Check your IRA funds prospectus to see of any
blue chips are a part of the portfolio. If so, you are a stockholder
benefiting from "crony capitalism." Also, a June 2014 letter to Congress
<http://exportersforexim.org/wp-content/uploads/sites/15/2014/06/FINAL-NAM-Chamber-Joint-Ex-Im-Letter-with-signatories.pdf>
includes hundreds of businesses in addition to chambers of commerce and
economic development groups all over the country supporting the renewal of
the program. There are a lot of publicly traded companies on the list that
don't make the big, splashy headlines.)
- The American corporate tax rate is the highest in the world already
putting business - big or not - at a disadvantage. Corporate inversions
are already happening. Without Export-Import American business would be
further in the hole compared to the rest of the world. More headquarters
may be compelled to leave.
- The Export-Import Bank enjoyed BROAD bi-partisan support for decades.
It was not until Barack Obama urged the charter's renewal and Eric Cantor
lost a primary partially due to being the liaison with Wall Street, that
more moderate Republicans (i.e., Kevin McCarthy, Mitch McConnell, etc.)
turned against the concept, let alone the standing entity, thus aligning
themselves with more hard line conservatives without a business background.
- There have been scandals of late within the Export-Import Bank. The
whistleblowers have come from within the bank itself, reporting the
problems to the inspector general.
Even if the American government was not set up to hand out loans to foreign
buyers of American export products, in order to compete economically at a
global level (and actually find buyers for capital asset level equipment)
every advantage must be afforded the large cap businesses that collectively
employ millions of Americans, who in turn spend their earnings in retail,
entertainment, and essential services establishments all over the country.
In that way, employees of big businesses spend their money in small
businesses, keeping them afloat. Publicly traded companies, like Boeing
and G.E. and Alcoa and Caterpillar are some of the stocks that make up
securities-based retirement funds that grow thanks to dividends rolled into
the principal. Small and medium sized businesses serve as vendors to big
business. When the big business profits, so do they.
It's somewhat of a ripple, or "trickle down" effect and eventually everyone
benefits.
The Export-Import Bank charter is due to expire September 30. There are
many cries to let it die. The better option, however, may well be to
extend the charter and fix the issues with it or spin it off somehow rather
than leave so many employers somewhat high and dry in the face of a world
that is aggressively economically competing at the national level where we
do not seem to be interested.
Dan Burrows says Export-Import is not sexy, but important to American
manufacturers that rely heavily on exports. The above mentioned letter
signers call the idea of allowing the Export-Import Bank to close
"unilateral disarmament". Without Export-Import, what are the options
overseas buyers have if they cannot secure loans or credit to purchase
American products? Go elsewhere. So would the program's revenue to the
Federal Government.
Okay, detractors, the hot potato is now in your court. How is ditching
Export-Import good for America?
*Better yet...how do we use it as leverage to get the incandescent light
bulb back?*
*Cultural Limits <http://ratnation.me/author/mynewpolitics/>* | September
1, 2014 at 3:29 pm | Tags: aviation <http://ratnation.me/?tag=aviation>, big
business <http://ratnation.me/?tag=big-business>, chamber of commerce
<http://ratnation.me/?tag=chamber-of-commerce>, Conservatives
<http://ratnation.me/?tag=conservatives>, Export-Import Bank of the United
States <http://ratnation.me/?tag=export-import-bank-of-the-united-states>, free
markets <http://ratnation.me/?tag=free-markets>, market forces
<http://ratnation.me/?tag=market-forces>, retirement
<http://ratnation.me/?tag=retirement>, retirement portfolios
<http://ratnation.me/?tag=retirement-portfolios>, Tea Party
<http://ratnation.me/?tag=tea-party>, trickle down economics
<http://ratnation.me/?tag=trickle-down-economics>, Wall Street
<http://ratnation.me/?tag=wall-street> | Categories: 2014 Midterm Elections
<http://ratnation.me/?cat=120155825>, Crony Capitalism
<http://ratnation.me/?cat=1074380>, Economy
<http://ratnation.me/?cat=17656840> | URL: http://wp.me/p1bb2w-gEB
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