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What Do Solyndra, Mexican Drug Cartels, And Enron Have In Common?

By: Chris Chocola (Diary)  |  April 23rd, 2012 at 09:28 AM  | 

RESIZE: AAA

Answer: all three received subsidies from the Export-Import Bank. Here’s the Club for Growth’s new web video:

The Export-Import Bank is nothing more than a fund for corporate welfare backed by the American taxpayer. It’s time for Congress to shut down the Export-Import Bank for good.

Chris Chocola
President – Club for Growth

 

 

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  • http://www.BillBowenAuthor.com RightinSanFrancisco

    So, the real question is whether these loans are economically viable, or whether they are really a subsidy to the exporters. If the prior, they should be manageable in the free market. If the latter, they should violate WTO guidelines and raise questions of how our government decides which industries and companies to subsidize.
    www.RightinSanFrancisco.com

  • http://www.wiringharness.co Gary

    The premise of the debate is that the Ex-Im Bank is nothing more than a puppet for large corporations, providing them with a slush fund of taxpayer money to fund their wild dreams. That isn’t an accurate representation of the bank or it’s mission. The bank offers some direct loans, but primarily offers guarantee backing to commercial banks making loans to foreign entities, allowing US businesses OF ALL SIZES the ability to ship products abroad. The banks are in fact making loans to the foreign importer of the product, which allows the foreign company the ability to finance purchases of American made products at rates that allow US manufacturers to compete.

    This isn’t a free lunch. The importing entities must be creditworthy, generally providing at least 3 years of audited financials and/or guarantees from credit worthy guarantors (in some cases sovereign governments). They must meet standard health of business ratio requirements such as debt to equity and must have been profitable for the years the financial statements cover. In short they must be able to demonstrate a good faith ability to repay the loans made. The bank has actually made billions of dollars on the loans made and guaranteed, returning that money to the US treasury.

    The primary mission of the bank is to support the creation of US jobs through export support (the name is actually a misnomer, they do not support imports). All transactions covered by the bank are viewed through this prism, and those that do not show a direct impact on creating or preserving US jobs have a difficult task in gaining approval (read almost can’t be done).

    Further, this process is ongoing in every developed country from Europe to Asia, and to eliminate this as a arrow in the quiver of US manufacturers is tantamount to unilateral disarmament.

    We can agree that there are many government programs that are wasteful and unnecessary that should be ended. There are many programs that provide taxpayer money to lost and unseemly causes. However, keeping those programs while eliminating ones that actually provide tangible benefits to job creators and provide more money back to the treasury than is taken out is irresponsible.

    Government shouldn’t be picking winners and losers and making decisions about which companies and industries will survive and thrive, but that isn’t what the bank does. It does not directly create products or markets, it merely enhances the free markets ability to create, build, and sell US products abroad. It supports the free market system. That’s unusual enough under the current administration that it should be celebrated, not demonized.

    Foreign companies already have advantages in tax rates, labor costs, and regulatory environments. Do we really want to give them further advantages and destroy more quality American jobs?

  • duncer

    Extensive comment but i did not see why the companies regular bank or Chase, BOA, or Wells Fargo could not do the same thing. Why does it have to be a govt. controlled bank?

  • http://impudent.edublogs.org/ kyle8

    Where in the constitution is the government authorized to go into business and compete with a private concern? As for giving foreign firms advantages, If a foreign firm gets a handout from it’s nation’s taxpayers it does not follow that our taxpayers must be similarly burdened.

  • funwithknives

    1) Where is this in The Constitution?
    2) Why is this money expenditure not voluntary and paid for by Lotteries, bonds,corporate donations,venture funds, or similar.?
    No one here Was Asked to ‘contribute’. A uniform, badge, and gun were the ultimate arbiters.
    Is there no other way to finance this *Bank*? If there is a return, why are shares not offered in a free marketplace,allowing citizens to invest with thier full knowledge and compliance, and profits distributed,or dividends paid out.?
    If Taxation is:” Stealing Other Peoples Money” {one citizen, present and accounted for!} Call Ex-im anything you please, but why should I pay for it?
    Regardless, if it is The Black Hand, or Uncle Sam, it’s still theft and that ain’t going away. Let’s have a National Referendum and get this over with.

    IS JGB on board? {He’s here, somewhere…..}

  • seventen

    I mostly hear about what Romney is and is not. Could there possibly be someone else that can run and win this election for the Republicans? I heard there can be others nominated at the Tampa meeting? IF so, it would not be Romney. The polls are never very correct because who knows if they were taken in a Dem. or Rep. territory? There are simply too many people that are not interested in politics and have no idea who to vote for, unless someone tells them. (which is happening and some are being bought, as in 2008)
    If people were to realize what problems we have, maybe they would find out for themselves by the way our country is buried JUST not covered up yet, but will be without a real Leader that can do the job a President is supposed to. I wish that all those young women voted for this Muslim because they thought he was handsome was very WRONG! Never vote for a person who can destroy our country by trying to take over all of us by LIEING constantly. You should have realized who you vote for should be a leader who can lead our country up and out of the hole this administration has put us in, NO it wa not the previous president, BUT BHO who always blames someone else for anything done badly. In three and a half years he has cost us more than ALL other presidents together. AND he did it in less than the four year term. Please people know what has been going on and CHANGE our way with a Leader President, which we have not had in this administration, AT ALL. They have stomped on, torn up and voided our Constitution. Why not try it by what our Constitution tells us, since it has worked for over 200 years??????

  • christiandystopian

    The irony of this is that all this money coming from our financially strapped government is borrowed from the Federal Reserve Bank.
    Nobody’s budget, especially Paul Ryan’s proposes any cuts at all to the Export Import Bank. Instead they want to slash my Veterans Benefits & Social Security which I already paid for.
    One thing these folks don’t lack is unmitigated gall. On the other hand I have friends on both benefits that support Ryan’s budget!
    “One cannot overestimate the gullibility of the American voter.”
    George Farmer
    “You can fool some of the people all of the time & that’s the ones you want to concentrate on.” George W. Bush

  • lastgopinillinois

    to vote NO on re-authorization of the EXIM Bank.
    For that matter, why cant individual corporation CEO’s and salesmen arrange for their own funding thru private banks and negotiate directly with foreign commerce to make trade deals ?
    In other words, why does there need to be any government entity involved?

  • http://www.wiringharness.co Gary

    they are not in business in competition with a private concern. any private concern may solicit their help on equal terms.

    there is no taxpayer handout, the bank pays for itself with the fees it charges to the borrower.

    and, arguably, the Constitution grants this power when it says that Congress is empowered to regulate commerce with foreign nations.

    Chase, BOA, Wells Fargo, Merchants, Farmers, and a host of other small banks make the loans. Ex-Im acts more like insurance allowing the commercial banks to make the loans at reasonable interest rates. and one other thing, the main reason why the Ex-Im is needed is due to all the banking regulations stacked on the industry. banks are not allowed to take risks, so to be in compliance they have to have some risk offset. that’s where ex-im comes into play.

    regarding individuals negotiating their own trade deals with foreign nations, that’s specifically a power reserved to congress by the constitution. and as a small business person who used to be a large corporate business person, i would not want to take on GE, Boeing, Alcoa, Sweden, China, Russia, etc. all on my own in trying to negotiate a trade deal.

    the money expenditure is voluntary. those taking the loans pay fees to the bank. they don’t have to, they choose to. as a taxpayer, you are already participating since any profits are returned to the treasury. and, arguably, any individual or group could always set up their own entity and offer the same services. i don’t think there is anything preventing that except business acumen.

    regarding loans being economically viable i restate as before that the primary reason for the ex-im backing is so commercial banks are not in violation of regulatory strictures.

    the money is not coming from the financially strapped government. the whole point was that this is one of the very few, maybe the only, program that is puts back rather than taking out. it does not have a negative effect on veterans benefits. for that look to social security, medicare, medicaid, extended unemployment benefits, solyndra, wind farms, Chevy Volt, bio-diesel, TARP, auto bailouts, student loans, FHA, Fannie Mae, Freddie Mac… before we try and dismantle something that actually works and doesn’t cost the taxpayer anything, why don’t we focus our attention on getting rid of all or even some of these?

    i am not a big government guy, i dislike almost everything about most of what the federal government does beyond defense and maintaining a currency. but, i am also a realist who knows that there are times when pure ideology may be misplaced. in the real world other nations support their industries in this manner. if we stop then we are all diminished by the results. imagine Boeing being unable to sell airplanes (remember that Airbus gets this support to sell to US airlines but Boeing doesn’t). how many jobs does that cost? how much does it inflate the welfare roles? how about all the companies that sell to Boeing? what about GE selling turbines, jet engines, or MRI machines? what’s the economic impact of that?

    i would like it if every nation agrees to stop this practice. until they do, let’s not throw the baby out with the bathwater.