” What’s worse than using taxpayer money for special interests and cronyism? Maybe sending taxpayer money to nations that aren’t the best friends of the United States.
The Export-Import Bank does both. It loans money to foreign companies and governments to buy products from politically favored American companies. Hard-working Americans are backing these loans.
This map shows just a few of the countries where your money is going.”
The infographic below , also from Heritage.org puts the “lending” in perspective …
Call it cronyism international . See also this piece from Heritage:
The Export–Import Bank: A Government Outfit Mired in Mismanagement:
” Advocates of the Export–Import Bank (Ex–Im) are lobbying Congress for reauthorization by claiming that its taxpayer-subsidized financing is a safe—and lucrative—investment. But even a mountain of rhetoric cannot bury the facts: The bank is beset by mismanagement, dysfunction, and risk, all of which have been documented for years by Ex–Im’s own inspector general and the Government Accountability Office (GAO). The problems are the inevitable result of government assuming a function far beyond its proper purview and one that rightly belongs to private business alone.
The bank’s current authorization is set to expire on September 30. Ex–Im provides loans and loan guarantees as well as capital and credit insurance for U.S. exports. The financing is backed by the “full faith and credit” of the U.S. government, which means taxpayers are on the hook for losses that bank reserves fail to cover.
Allowing the authorization to expire should be an easy call for lawmakers. There is no shortage of private investment: 98 percent of the $2.2 trillion in annual U.S. exports are financed without help from Ex–Im. And despite promises to clean up their act, bank officials persist in underestimating costs, misstating losses, and failing to maintain adequate capital reserves. But even if the bank functioned perfectly, there is no justification for the government to act as financier to favored interests.”
Doug Bandow has a piece in Forbes about this international cronyism underwritten by the US taxpayers that provides the reader with a much better understanding of the true nature of the Export-Import Bank and the love that exists for it in the corporate world …
” Nothing brings out the well-tailored lobbyists in Washington quite like a threat to corporate welfare. With the Export-Import Bank’s legal authorization set to run out this year, the Chamber of Commerce recently led a Big Business march on Capitol Hill to protect what is known as Boeing’s Bank. Over the last eight decades ExIm has provided over a half trillion dollars in credit, mostly to corporate titans. Congress should close the Bank.
ExIm was created in 1934 to underwrite trade with the Soviet Union. The agency piously claims not to provide subsidies since it charges fees and interest, but it exists only to offer business a better credit deal than is available in the marketplace. The Bank uses its ability to borrow at government rates to provide loans, loan guarantees, working capital guarantees, and loan insurance.
The result is a bad deal for the rest of us. For instance, ExIm is not free, as claimed. Recently made self-financing, the agency has returned $1.6 billion to the Treasury since 2008. However, economists Jason Delisle and Christopher Papagianis warned that the Bank’s “profits are almost surely an accounting illusion” because “the government’s official accounting rules effectively force budget analysts to understate the cost of loan programs like those managed by the Ex-Im Bank.” “
Roll Call jumps on the end the Ex-Im bank bandwagon too…
” The bank’s erstwhile job is to provide loans and guarantees to banks, which then finance companies attempting to import and export goods. The lion’s share of its money goes to multi-national, multi-billion dollar corporations. Roughly 90 percent of its 2010 loans and guarantees went to ten major corporations like General Electric and Caterpillar. In 2012, Boeing received roughly 80 percent. Small businesses typically receive less than 20 percent of the bank’s loans by dollar amount.
These large, usually publicly traded companies would have no problem securing funding from elsewhere. After all, U.S. exports wouldn’t have reached a record high $2.2 trillion last year if there weren’t plenty of private finance opportunities available. Yet thanks to the Export-Import Bank, these companies can avoid the risk by using public money to guarantee private profits.
This generosity results in significant taxpayer exposure. American taxpayers are currently on the hook for approximately $134 billion in outstanding Ex-Im loans. This is a more than 100 percent increase since 2007, the year after the bank’s most recent congressional re-authorization. Every year, more companies realized that they can benefit from this arrangement. Last year’s 4,061 deals marked a 33 percent increase over the bank’s 2009 total.
In recent years, Ex-Im has given loans to such politically well-connected companies like Enron, First Solar, and Solyndra. None of these loans went well for the taxpayer; all three companies have since gone bankrupt. Meanwhile, most of the bank’s current beneficiaries can afford teams of lobbyists to keep the money flowing.”
If you still harbor doubts about the corporate cronyist nature of the ExIm , ponder this fact , in 2012 fully 44% of the “bank’s” loans were awarded to just three very well connected corporations , GE , Boeing and Black and Veatch International .
Given these facts it is difficult to see the Export-Import bank as anything other than taxpayer subsidy of private corporations on an international scale .Contrary to Obama’s rhetoric , he’s never met any crony capitalism he didn’t like .