“ Click here to call your Congressman and make your voice heard. Tell him to let the Export-Import Bank charter expire. ” The Export-Import Bank is a federal agency whose sole reason for existence is to use your tax dollars to subsidize sales of American manufactured goods to foreign buyers. It is nothing short of corporate welfare, and its business model (providing loans and loan guarantees at below market rates) is virtually identical to that of Fannie Mae and Freddie Mac. Almost half of all Ex-Im loans wind up lining the pockets of just one company: Boeing. General Electric is another top beneficiary. That’s right. Your tax dollars are underwriting a profitable company that didn’t pay any federal income tax in 2010 and whose CEO is Obama’s chief spokesman for more stimulus. And if these loans go bad, your tax dollars are legally obligated to bail them out. It also has the perverse result of actually costing U.S. jobs. 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. House Republican leaders have a golden opportunity to stand up for free enterprise, say no to bailouts, and peg Obama as a defender of corporate cronyism. All they have to do is sit on their hands until May 31, when Ex-Im’s legal charter expires. But that would be smart, and we’re talking about members of the Stupid Party who are in thrall to lobbyists for Big Business. So not only are House Republicans about to renew the charter for the Fannie Mae of Corporate Welfare, they’re planning to raise its debt limit from $100 billion to $160 billion! Smart Washington insiders say there’s no chance taxpayers will ever have to bailout these loans. These are the same smart people who told us Fannie Mae and Freddie Mac wouldn’t cost taxpayers a dime either, right up until the day they imploded. We need to kill the Export-Import Bank once and for all. The vote is supposed to come sometime this month. Tell your member of Congress that you’re tired of bailing out their corporate cronies. Click here for easy access to your Congressman and make your voice heard.
See the article here:
Will Republicans Vote to Raise the Debt Limit for the Fannie Mae of Corporate Welfare?
Over on the main site, Ralph Reiland explains
U.S. national security adviser Tom Donilon is now in Israel for talks with top officials. The Telegraph reports that while Washington claims the visit is routine, “Israel’s option of launching a strike on Iranian nuclear facilities was expected to be the urgent topic of discussion.” Israel has indeed been getting some further unfriendly messages from Iran lately. Last week Iran attacked or attempted to attack Israeli diplomats in Azerbaijan, India, and Thailand, with Israeli sources warning of further attempts . Currently two Iranian warships have docked at Syria’s port of Tartus. Yet the message from Washington continues to be — don’t do anything, the situation’s under control. It was further amplified over the weekend by Joint Chiefs of Staff chairman Gen. Martin Dempsey, who told CNN: It’s not prudent at this point to decide to attack Iran. A strike at this time would be destabilizing and wouldn’t achieve their [Israel's] long-term objectives…. We are of the opinion that Iran is a rational actor. We also know, or we believe we know, that the Iranian regime has not decided to make a nuclear weapon. Those finely attuned to Iran’s rationality could feel further encouraged by its recent letter to EU foreign policy chief Catherine Ashton, which proposes yet another round of nuclear talks and promises “new initiatives.” Secretary of State Hillary Clinton called it an “important step.” State Department spokeswoman Victoria Nuland was more restrained, noting that “we’ve had negotiations that… ate up a lot of time and didn’t go where they needed to go.” But is it rational to view Iran as rational? Steadily mounting evidence says no. Last week Israeli prime minister Binyamin Netanyahu asserted that the sanctions on Iran are not working, and “if anybody needed a reminder… it was the guided tour by Iran’s president in the centrifuge hall.” He was referring to President Mahmoud Ahmadinejad’s proud flaunting of Iran’s new, domestically produced nuclear fuel rods at a Tehran reactor. Netanyahu added: They send children into mine fields, they have suicide bombers, they send tens of thousands of rockets into our cities and towns. Such a regime should obviously not have an atomic bomb…. The Israeli leader, though, is not the only one with a grim assessment of the sanctions’ effectiveness. The Guardian reported on Friday that U.S. officials “are increasingly convinced that sanctions will not deter Tehran” from pursuing nukes, and that “the US will be left with no option but to launch an attack on Iran or watch Israel do so.” The Guardian quotes one U.S. official saying the “problem is that the guys in Tehran are behaving like sanctions don’t matter, like their economy isn’t collapsing, like Israel isn’t going to do anything.” And another one: “We don’t see a way forward. The record shows that there is nothing to work with.” And at a meeting of the Senate Armed Services Committee on Thursday, Defense Intelligence Agency chief Lt. Gen. Ronald Burgess said Iran is “not close” to stopping its nuclear program. Yet, while allowing that “Iran’s technical advances, particularly in uranium enrichment” mean Iran is “more than capable” of producing a weapon, Burgess said that decision would be made by Supreme Leader Ali Khameini — who “would base [it] on a cost-benefit analysis,” something that “plays to the value of sanctions….” Again, that strange mix of recognition and denial of reality, as if to say: yes, there is a threat, but we’re dealing with it effectively even though the indications are that we’re not. The Iran-as-rational-actor notion is even harder to sustain in light of mounting concerns about Iranian terror attacks on U.S. soil. Such worries are, of course, more than plausible given Iran’s plot, uncovered last October, to murder the Saudi ambassador to the U.S. in a Washington restaurant. Meanwhile Britain’s Sky News reports that “Iran and al Qaeda’s core leadership… have established an ‘operational relationship’ amid fears the terror group is planning a spectacular attack against the West.” Sky News says it has seen a “secret intelligence memo” that states: Against the background of intensive co-operation over recent months between Iran and al Qaeda — with a view to conducting a joint attack against Western targets overseas…Iran has significantly stepped up its investment, maintenance and improvement of operational and intelligence ties with the al Qaeda leadership in Pakistan in recent months. Western refusal to come to grips with the fanatic nature of the mullahs’ regime has a long pedigree. Such facts as Ahmadinejad’s fervent belief in the Mahdi — the mystical Shiite redeemer whose arrival, he believes, can be hastened with violent chaos — will not impress those determined not to be impressed by them. But in trying to get Israel — smack in the Middle East and with much direct experience of it — to wait contentedly for Tehran to apply “cost-benefit” calculations, the Obama administration has its work cut out for it.
See the original post here:
Still in Denial on Iran
Here’s a question: If tax dollars were being used to make prices cheaper for companies overseas while simultaneously forbidding American companies from enjoying the same luxury…would that be fair? I would submit that it’s not, and President Obama claimed to feel the same way at his State of the Union earlier this year : … It’s not fair when foreign manufacturers have a leg up on ours only because they’re heavily subsidized. Unfortunately, that’s exactly what is happening. Let me introduce you to something call the Export-Import Bank . The Export-Import Bank of the United States (Ex-Im) exists for the purpose of backing U.S. goods sold to foreign customers that are unwilling to take a credit risk. Basically the agency, which was created in 1934 by those executive orders we all love so much, makes sure people in other countries buy our stuff and prevents things like “credit” from getting in the way. One of the things that the Ex-Im currently does is provide foreign airlines loans at rates as low as 4% (vs. domestic carriers which pay much higher market rates). But remember, as great as these loan guarantees are, they are only available to foreign airlines, not U.S. airlines. This is because of something called the “Home Market Rule.” The Home Market Rule “prohibits airlines based in the domestic market of Boeing of the US or Europe’s Airbus (France, Germany, the UK and Spain) from getting ECA support. Instead these airlines must rely on commercial financing, which some complain is more expensive.” The result of observing this rule is that U.S. airlines do not have access to the below-market rate financing opportunities that their own government agency is handing out to foreign manufacturers. So what does all this mean? It means that whoever is selling an in-demand product to overseas customers might be doing pretty well for themselves . Of the $9.3 billion in loan guarantees Ex-Im issued in fiscal 2009, $8.4 billion subsidized Boeing sales. In Ex-Im loan guarantees, private banks or foreign governments finance the purchase (by a foreign company or government) of U.S. goods, and Ex-Im underwrites the loan, putting the U.S. taxpayer on the hook if the foreign customer defaults. This allows Boeing to offer lower prices, and it guarantees that Boeing and the lender get paid. This is called public risk for private profit. You may recognize this format. It’s basically the international version of Freddie/Fannie home guarantees except these houses fly. The Examiner piece goes on to point out precisely what might go wrong: For instance, Boeing landed a $2 billion-plus deal with the state-owned parent company of Air India. Bailed-out investment bank JP Morgan is lending Air India the cash to buy 68 Boeing jets. That’s when the taxpayer enters the picture. Ex-Im agreed at its June 11 board meeting last year to guarantee $2 billion of the deal. So, if Air India runs out of cash in the future, Ex-Im pays JP Morgan and Boeing — with taxpayer money. But would that ever really happen? Having the government guarantee sub-prime loans to enrich a select few American companies and sell product to customers that could not otherwise afford it has never come back to bite us, right ? Pew confirmed the data a year earlier and revealed that this same level of corporate welfare was being kicked out in 2007 & 2008 as well. The Export-Import Bank (Ex-Im)—the official government agency subsidizing U.S. exports of goods and services—provided nearly two-thirds of its long-term loan guarantees over the last two years to a single corporate entity, according to analysis released today by Pew’s Subsidyscope project. In FY2007 and FY2008 combined, Ex-Im issued $15.3 billion in long-term loan guarantees. Of that total, almost $10 billion, or an average of 65 percent, went toward the purchase of commercial aircraft made by the Boeing Company , the world’s largest manufacturer of commercial jetliners and military aircraft combined. (emphasis mine) With so many guarantees going to one American company, and with the other companies unable to access any of the low interest financing afforded to foreign customers, U.S. airlines have had to cut jobs in the thousands at a loss of hundreds of millions of dollars in employee income. For instance, in 2006 , Delta began nonstop flights from New York to Mumbai. But by 2009, the Ex-Im gave foreign competitor Air India over $3 billion in loan guarantees, which in turn were used to finance 68 Boeing 777-LR aircrafts at below market prices. The result was that “after confirming in June that it would move to its nonstop flight from Atlanta to Mumbai, India, back to New York, Delta Air Lines Inc. has now suspended the service altogether, leaving the airline with no nonstop flights between the United States and India.” Additionally, just last month American Airlines cancelled its nonstop flights to India and announced that it will lay off 150 airport employees. Now comes word that the Congress is considering the reauthorization of the Ex-Im and may increase the cap on its loans and guarantees by as much as $160 billion. Something I’m sure we all agree is more spending for which we simply can’t afford to be on the hook. Senator Tom Coburn, in a letter written to Senators Reid and McConnell, had this to say: We understand you are considering taking up the Export-Import Bank Reauthorization Act of 2011(S. 1547) during this Senate work period. While we are aware of the Export-Import (Ex-Im) Bank’s role in facilitating the export of U.S.-produced goods and services, Ex-Im is congressionally mandated to balance the benefits it provides to U.S. manufacturers against the harm it does other U.S. employers – a mandate the bank fails to follow. We realize that Ex-Im’s authorization expires at the end of May and that the bank has publicly stated its concern that it will reach its authorized financing ceiling of $100 billion in the next few months. However, these impending hurdles cannot and should not prevent Congress from addressing larger, more systemic failures of the bank. This is a complicated issue and one that I only know about because of the hard work of people like Senator Coburn. But the fact of the matter is that the Ex-Im is defying its mandate and providing a courtesy to foreign competitors that is detrimental to American interests, all to the benefit of only one American company. We cannot continue to risk American tax dollars to finance our own competition. The Ex-Im authorization must be reviewed, and the mandates that are not being followed must be enforced. Cross-Posted at Ben Howe Blog Follow @ben_howe
Continued here:
Why is the United States Government Financing Our Foreign Competition?
American manufacturing is coming back. By how much and for how long is uncertain, but the signs are clear and they are growing. For example: General Electric, a huge conglomerate, may be in the forefront of the movement. Overall the company cut U.S. jobs when the recession hit, but has added 9,000 since 2009 and plans to add 4,500 or more this year. Among its products are jet engines (it’s the world’s largest manufacturer of them). It has announced it will open three new engine factories this year, in Ohio, Mississippi and Alabama.
