Government to Expand Its Role in Financing Exports
See, It’s Not Socialism When it Makes More Money for Business
In violation of the principles of free trade, in violation of the idea that government should stay out of business operations and in violation of the idea that government never ever created a single job, three major business groups are working strenuously to see that government continues to expand its role in lending money to support exports. The vehicle by which the government does this is something called the Import – Export Bank.
The bank—overseen by a White House appointee and funded by customer fees and interest payments—has doubled its financial support in the past four years to $41 billion annually. But without congressional action, the bank may soon hit its limit.
At a micro level, the issue pits airplane builder Boeing against airline company and Boeing customer Delta.
Boeing, the bank's top beneficiary, which is leading the corporate charge in support of the administration's efforts to renew and expand lending. The bank has helped finance billions of dollars in sales of Boeing aircraft to foreign customers.
One of those customers is Air
India, which until 2008, competed directly with Delta on the to Mumbai route. But Delta stopped flying the route, which it had switched to New York Atlanta, saying it couldn't compete with Air 's fares. India
The Obama administration and Democrats support increasing the activity as a way to stimulate exports and increase employment, and look’s who is also on board.
Boeing's position is shared by the U.S. Chamber of Commerce, the National Association of Manufacturers and the Business Roundtable, an association of chief executive officers, as well as numerous lawmakers whose districts include Boeing plants. They argue the bank enables deals to go through that otherwise wouldn't, boosting business and
The dilemma for Conservatives is that the Import-Export Bank violates their principles, and surprisingly enough some Conservatives are actually standing up for their principles.
But Delta has a formidable ally: House Majority Leader Eric Cantor, a Virginia Republican who has called for winding down the bank's powers. His aides say he views the bank's activities as improper government interference into the private marketplace, putting taxpayers at risk. The
U.S. government is ultimately on the hook for bank losses, though the bank consistently earns profits that are returned to taxpayers. U.S.
And even The Dismal Political Economist believes that Conservatives have a valid position. But the problem is that once a government activity is started, it becomes a part of the system and while maybe it should never have been initiated in the first place, it is there and a large number of people and industries depend upon it. And now that other countries have started doing the same thing, stopping the program would put American companies at a disadvantage.
One must assume that the irony of all of this is lost on the U. S. Chamber of Commerce, a group that has spent millions and will spend millions more to defeat Democrats who support their position.
Senate Democrats have proposed a four-year reauthorization of the bank along with an increase in the cap on its financing activities to $140 billion from $100 billion. They plan to attach it to an unrelated bill that would aim to ease the regulatory burden on small businesses trying to raise capital
Probably so, remember they are ideologues and nobody ever accused them of being the brightest people in the room. No word yet on where Mitt "Corporations are People My Friend" Romney stands on the issue, but as soon as he has decided which side to pander to we'll bring you the news. Of course, it's still a long way to go to the election, so Mr. Romney could easily take both sides before November.