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Re-Authorizing Ex-Im Bank (Or The Easiest Way To Make A 500x Return On Investment)
Submitted by Simon Black via Sovereign Man blog,
What’s the easiest way to make a 500x return on investment?
You might be inclined to say, “Buy silver” or “invest in a successful startup while it’s still a privately held company.”
But if you’re a major Fortune 500 company, you generate a 500x return on investment by buying off politicians.
A prime example of this is H.R. 4950: Protecting American Jobs and Exports Act, which aims to reauthorize the US Export-Import Bank for another seven years.
First, some background. The little-known Export Import bank in the Land of the Free (Ex-Im Bank) was created during the Great Depression by Presidential executive order under FDR.
Few people have ever even heard of this bank, let alone have a clue what it does.
Officially, Ex-Im Bank is a banking corporation organized under the laws of the District of Columbia, and its capital stock is held by the United States of America.
The bank’s primary mission is to finance trade. More specifically, it provides loans to foreigners who want to buy American products.
So if you’re a Malaysian company that wants to buy a bunch of vehicles from GM, Ex-Im Bank might just float you a loan, funded and guaranteed by the US taxpayer.
The intention was to make American goods cheaper for foreign companies to buy, thus encouraging American exports. And of course, to create jobs. Always the jobs.
(In fact, there’s a bill on the floor of Congress right now to change the name of the bank to the “Made-In-America Bank”. Ufff. Cheesy.)
But who is Ex-Im really helping? Let’s look at the numbers.
Ex-Im Bank brags that they have financed exports worth nearly $200 billion over the last five years.
That certainly sounds like a lot. But at $40 billion per year, it’s a drop in the bucket compared to the $1.57 trillion that was exported from the US last year alone.
That said, research by George Mason University’s Mercatus Center showed that an astounding 76% of Ex-Im Bank’s loan portfolio directly benefited fewer than 10 huge corporations, including familiar favorites like General Electric and Boeing.
Even the government’s own Congressional Research Service found that in FY 2010, “more than 60% of Ex-Im Bank’s loan guarantees, by dollar value, supported the sale of Boeing airplanes in foreign countries.”
In fact, last year alone, Boeing received $8.3 billion in financing for its products from the Ex-Im Bank. This translates directly into sales worth roughly 10% of the company’s 2013 revenue.
So while Ex-Im doesn’t really do jack squat for the economy, they’re really moving the needle for a handful of favored companies. Especially Boeing, the bank’s #1 beneficiary.
And Boeing’s getting a pretty fantastic deal for it. According to OpenSecrets.org, Boeing spent $15.2 million on lobbying in 2013. For the $8.3 billion they received, that’s a 54,539% return on investment. Not too shabby.
Needless to say, Boeing has a huge incentive to maintain this special relationship.
That would likely explain why just in the second quarter of 2014, Boeing spent over $4.18 million on lobbying for this bill to be passed.
You see, Ex-Im Bank’s charter is due to expire at the end of this month. And HR 4950 ensures that the bank will keep operating for seven more years.
More importantly, if this bill gets passed, Ex-Im Bank’s funds will be increased by an additional $5 billion each year for at least the next seven years. Naturally the taxpayer is on the hook for all of this.
So each penny that Boeing has spent on lobbying is looking like a smarter and smarter investment.
This is how the system works, plain and simple. It’s rigged for the benefit of politicians and corporations at the expense of the individual.
Politicians get money to finance their campaigns and keep themselves in power.
Corporate leaders get their fat bonuses for hitting the numbers.
Even the bureaucrats at Ex-Im Bank have managed to line their pockets (prompting a Congressional corruption probe into the bribery of several bank employees, and Board of Director ‘conflicts’.)
As you can see, it’s a win-win situation! Except for the little guy, of course.
This is reality in the Land of the Free.
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I'm an exporter - importer, Jerry.
Merica: Export inflation, import Ebola.
A little background on Ex-Im Bank. Sounds like purely CIA money laundering to me:
http://en.wikipedia.org/wiki/Export-Import_Bank_of_the_United_States
Very true and historical facts would concur. Makes me wonder what happened to the hotshots that busted them in the 80's...like if they are still around?
SB is really starting to piss me off. He starts off with might be a serious issue, then he befuddles it, makes stupid conclusions and passes it off as intelligent.
Methinks he 's an idiot.
Rather than name calling, please tell us where Simon is wrong on this one. I'm not a big SB fan either, but I find nothing wrong with this post. No where in the constitution does it authorize the federal govt to intervene in the market or loan business like this. 'Other countries do it too' carries no water with me and doesn't make it right. ALL the ex-im does is use tax payer money to inflate Boeing and GEs earnings and benefit their shareholders. He gets it right on this one.
Yes he does. Im-Ex is another way imperialism works: through debt; making the USD that much stronger and lining the pockets of the politicians and corporations in the process. Anyone wonder why RE values in DC are so fucking ridiculous?
Must be because they love the Redskins.
gotta sell newsletters
Tell congress about the shrinkage!
Most developed countries have financing programs to support export. But I do agree that it seems the "connected" companies seem to get the most use of the service. GE finance could easily provide the funds IF they were really ready to assume the risk. But it is much better to get the taxpayer to assume the risk.
In Canada, the Export Development Bank offers similar services, including fiinancing guarantees. Many European countries have the same thing.
I'm not saying that it is right that a few big corporations take advantage of the programs....but hey, money talks, and a small start-up certainly will have less leverage than a multi-billion $ company with lost of lobbying funds.
But I do remain at a loss as to how to "gracefully" evolve the system....
Since every form of "investment" is based on making "money" out of nothing as debts, every channel for that investing is necessarily distorted by it fundamentally being enforced fraud.
Evolution aka Natural Selection -is seldom graceful.
The muppet crowd doesn't have a firm grasp of interest rate differentials, much less who ExIm is actually loaning money to (as opposed to whose products receive outsized support and political favoritism from ExIm).
With all the Putin cocksuckers, leftists, anti-Imperialists, and anti-Neo-Colonialists around here you would think more people would grasp that the problem with Exim is the current practice, and not the theory...
Evgeny Fedorov alluded to the crux of the problem (interest rate pricing in a g10 dominated finance/currency oligopoly)
https://www.youtube.com/watch?v=5qLMG0KD3rI#t=1160
(the first 5 minutes from the start of the link...)
Of course the cabal will be taking advantage of the chaos they created, more and more boldly and frantically so.
So by definition, this can't go on much longer, regardless of... anything.
The laws of exponents apply to human behavior too.
They are corporations and politicians. That's what corporations and politicians do. They are like pedophiles. They can't stop until they are locked up.
Speaking of pedophiles and pedophile rings.
+1400 children raped, tortured and some disappeared, while authorities knew in Rotherham... What happened to the law, to justice? So much international noise for one journalist, not so for 1400 UK children?
http://www.dailymail.co.uk/news/article-2752235/You-let-sister-murdered-...
http://www.mirror.co.uk/news/uk-news/rotherham-child-sex-scandal-resulte...
IN BRITAIN,THE CORRUPTION RUNS DEEP: Rotherham Whistleblower Reportedly Threatened by Police, ‘Feared for Life.’ “Further inquiry into events in Rotherham is revealing the degree of corruption that facilitated two decades of child sexual exploitation in the central England town. A Home Office researcher who says her report into the widespread abuse in the early 2000s was suppressed now says, according to the Sheffield Telegraph, that she was also the victim of threats from police officers aware of her investigation.
There is a lot on the internet about these so called pedophile rings
Martin Luther King Jr.: 'Injustice anywhere is a threat to justice everywhere.'
from wiki: On the campaign trail in 2008, then candidate Obama called the bank “little more than a fund for corporate welfare"...
That was before Arabia was on board. $18 million in ceilings for the airport in Doha, Qatar... Muscat, Oman and Doha II in the pipe.
http://www.whitehouse.gov/blog/2014/03/06/export-import-bank
And we all know how firm Obozo's grasp of finance and economics is...
I'll bet the chairman and president of this "bank" is jewish. Lets see here... (tap..tap..tap..)
Bing!
http://www.wikipedia.org/wiki/Export-Import_Bank_of_the_United_States
Gay! (and perhaps Jewish).
Yup, he, Fred Hochberg, has the Ashkenazi right of "running" ("return") like many of the rest.
http://thezog.wordpress.com/who-controls-the-economy/
A non "return" able American.
Not only Jewish: "He was a fundraiser for the campaign of Barack Obama for President and a member of the Obama transition team".
I'm tired of all this in-your-face corruption widespread in the West. At least in East Asia they *try* to hide it...
I swear the chinese are always complaining about corruption but seriously:
All of them could be up for capital punishment in China.
Yes, anyone who studies the ability of the funding of politics to produce returns for those who invest in political contributions to successfully corrupt politicians discovers that it is routine for that kind of investment to gain 1,000 times back in profit. Furthermore, then the profit from that fraud can be reinvested in more frauds, in a vicious spiral. Indeed, all of American history for at least a Century has been the result of the corruption of the political processes by the funding of politicians.
Of course, the funding of the political processes also included paying for assassinations of those problematic politicians who otherwise could not be bribed or intimidated. The end result, after a Century or so of American history of the profits from fraud reinvested in more frauds is that the American government is more than 99% a system of legalized lies, backed by legalized violence. All one has to do is study the history of the funding of politics in order to perceive the effective patterns of who successfully corrupted the political processes. (The most recent episodes have been in the Profit From Disease Industries becoming the biggest donors, to drive the obscenity of Obamacare.)
The deeper problem is that AFTER the monetary system was completely corrupted, more than a Century ago, that monetary system became metastasizing cancers, which have infected every social institution, from the schools systems to the mass media. EVERYONE HAS THEIR LIVES CONTROLLED BY ENFORCED FRAUDS. There are almost no politicians left that are not puppets controlled by money, performing for the masses of muppets who are also controlled by money.
"Politicians get money to finance their campaigns and keep themselves in power." As that became worse and worse for more than a Century, America led the way for the whole world to be controlled by enforced frauds, which automatically drove civilization to become crazier and crazier. Anyone who takes enough time to learn about that will eventually learn how bad that situation has become: our society is terminally sick and insane, because ALMOST EVERYTHING IS CONTROLLED BY LIES BACKED BY VIOLENCE.
Moreover, IF one does a good enough analysis, one will discover that was ALWAYS the case. Human realities were always organized lies, operating robberies. There are no exceptions to the rule that money is measurement backed by murder. Any "bank" must necessarily operate inside of that context. However, the ways that civilization have developed not only created systems based on the maximum deceits and frauds, but also created controlled opposition groups which promoted false fundamental dichotomies and the related impossible ideals, that actually caused the opposite to happen in the real world. In that vein, almost all campaign finance reform recommendations are usually more immaculate hypocrisy, which are backwards, and would, IF implemented, actually make the opposite happen in the real world to that which they were promoted as being supposed to do.
The problem of the role of the funding of the political processes driving runaway corruption of civilization (where those who successfully corrupted governments often made 1,000 times the profit back from their expenses incurred when corrupting that government), cannot be better resolved as long as one stays within the same old-fashioned frame of reference, relying upon presumed dualities, or false fundamental dichotomies, and their related impossible ideals. It takes a series of intellectual scientific revolutions, from the basic philosophy of science, through to politics, to better deal with the ways that there have been vicious spirals of the money in politics corrupting the political processes, to in turn corrupt the monetary system itself, more and more, faster and faster, at an exponential rate. Everything regarding the theory of democratic republic, operating through the rule of law, has been almost totally destroyed by the history of the practical realities of the roles of money through the political processes!
Nothing less than a thorough understanding of the ways that money is measurement backed by murder is enough to adequately address this social situation that almost everything is now dominated by enforced frauds, which are driving civilization towards psychotic breakdowns, due to the paradox of final failure from too much "success" at controlling civilization through vicious spirals of increasingly crazy corruption.
Ex-Im bank is a dual party "slush fund".. Look at this article, and who's openly endorsed it.
The Facts about Ex-Im Bank
The PORK starts and ends at Ex-IM Bank...
The website hasn't been updated since June 24th? This entity deals with "$billions upon $billions" of debt serf taxdollars, and is so deeply buried in the .gov beauracracy that it feels untouchable.
JFC! How many other .gov neutron bombs are going to get dropped before people "wise up"?
You can't wise up a sucka who luv big brudda.
The .gov TEET overfloweth with milkmaids posing as heros...
IF Ex-Im Bank's operations were in fact consistently profitable WHY wouldn't private institutions and investors vie for the business or the exporters themselves vendor finance the sales?
Because they can charge HIGHER interest rates.
I see it as a variation on the vendor financing model that worked out so well in the dot com bubble, selling routers and switches to startups with no revenues. The beauty of the Ex-Im arrangement is that this time the burden of risk is shifted to us tax donkeys. Boeing gets to book the sale (to a customer that probably wouldn't be able to buy without the loan) and if Boeing gets stiffed, you and I pick up the tab.
And here I thought it was the CIA laundering all the dope coming out of Afghanistan and Columbia and selling it to the cartels and various mafias worldwide.Thought the profit was a lot higher there.
Everywhere you turn the tax payer has to carry the load. The problem is that you get hit from so many directions that all are well justified (in someones eyes) you can not focus your aim at any particular person or point. There are so many government scams that people simply give up and resign themselves to be taxed until death. Its little wonder that some prefer a total collapse or a world war rather than bear this burden any longer. What I do not understand is why the 6% approval rating of government does not translate into mass demonstrations, tax revolts, and an introduction of a third party that is sworn to reverse the trampling on the Constitution.
Always about money and power. Any other belief or expectation is insanity.
An American, not US subject.
"My unicorn will provide you with all the low cost healthcare you desire."
If this bank fails I guess the US is in the hole.
Then again, I am commenting on an article about the ex-Im bank.
You get what you elect.
There you have free markets for the sake of ... capitalism.
And still you all are gonna whine about socialism.
While capitalism sucks like every other system.
Or maybe even worse.
As unlimited lobbying (in other words legalized unlimited corruption/prostitution) - no doubt about that - is a very well paying magnet for parasites of all sorts.
Let me guess: x out of y of your politicans are corrupt? x out of y get lobbying funds for bending the laws in this or that direction? And it is completely legal.
Sodom and Gommorah in modern daylight.
Free markets and capitalism works as designed.
Though the masses keep worshipping the system.
You get the politicans and the system - you elect.
So in all honesty - you get what you deserve.
Truth is - nothing has changed since stoneage.
There are the haves and oligarchs - and there are the tax paying (= filling the oligarchs pockets) and dumb as the night masses, slaves and sheeple.
Wake me up again a zillion of years later.
If it wasn't for Zero/Hedge the general populace would NEVER know, Ex-Im bank exists.
If it wasn't for Zero/Hedge the general populace wouldn't know about Euro Clear and Belgium back-dooring swaps from European banking arms in the U.S., to keep European bond yields low.
Don't get me started on BIS> Bank of International Stupidity...
This good article scratches the surface. Aircrafts are generally leased and there is another tricke down benefit for the leasing adjuncts. Foreign Policy overtures to Buyers (mainly State Owned Corporations of other nations including China) seal deals.
So just not good jobs alone shipped abroad, taxpayers' monies are used for masked export subsidies and greases. Why lament unless you are still dreaming that you are not under Crony Capitalism.
And amongst the slaves:
"A high-school student in the US state of South Carolina has been arrested and suspended from school over a writing assignment in which he claimed to have killed his neighbour's pet dinosaur"
http://www.bbc.co.uk/news/blogs-news-from-elsewhere-28897353
I thought you had a right to free speech? Seems not....
Careful getting that tinfoil hat through the TSA checks, Simon.
Oh, wait, never mind; Simon would smuggle himself out in the rectum of a head of Kobe beef or something to avoid declaring his metal purchases.
Bullish on Boeing, G.E. and heroin!
Isn't this just "Vendor Financing"?
Something we say Germany does to export its mercs/BMWs? Or China lending to allow clients to buy goods?
Those who look closely understand that it is not the 1% at the top stealing the icing off the cake, but the much smaller .1% or .01% that are skewing the numbers and overreaching.
I contend the biggest problem is the massive growth in crony capitalism and corruption in Washington. Much of this can be attributed to the ability of those in control "changing the rules" and positioning themselves to benefit at every corner. In our busy and complex world we have found it impossible to watch all the moving parts. More on this subject in the article below.
http://brucewilds.blogspot.com/2014/05/how-empires-collapse.html