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Peak Crony Capitalism: First Citi Writes US Financial Laws, Now Boeing Tells Ex-Im Bank What To Do
Back in December, the US population was briefly but dramatically shaken, when it was revealed that none other than Citigroup - a Wall Street firm - had drafted the Congressional language for the Derivatives swaps push-out provision, the add on that assured that taxpayers/depositors would be on the hook for any future derivatives fiasco at the TBTF banks (whose total derivative holdings amounted to $303 trillion with a T) component of the Omnibus funding bill.
Confirming that cronyism in Congress is alive and has never been better, was the further discovery that the main backer of the bill is notorious Wall Street lackey Jim Himes (D-Conn.), a former Goldman Sachs employee who has discovered lobbyist payoffs can be just as lucrative as a career in financial services.
Subsequently Zero Hedge first exposed just why Citi was so intent on making sure taxpayers would be saddled with the bill: while all other banks were actively deleveraging their derivative exposure, Citi was piling in, and just in Q3, had boosted its derivative holdings by a record $9 trillion in just the third quarter to a whopping $70 trillion, surpassing even JPM. Worse: all of these derivatives would be housed precisely in the FDIC-insured silo, so when (not if) this leveraged house of cards explodes, it will be US taxpayers picking up the pieces.
The people were outraged, Elizabeth Warren screamed on a few occasions and... nothing changed. By then the oh so shallow US attention span was focused on the next scandal, so things promptly reverted back to normal and Wall Street was again in charge of telling Congress how to set the stage for the next upcoming financial sector bailout.
This was crony capitalist capture of Congress at its best. But it wouldn't end there.
Today's most under the radar news, just as Citigroup was to Congress, and the swaps push out language, so Boeing, that primary recipients of the generosity of America's Export-Import (Ex-Im) Bank, has been caught red-handed drafting the rules of none other than the Ex-Im bank itself! According to the WSJ: "when the Export-Import Bank sought to respond to critics with tighter rules for aircraft sales, it reached out to a company with a vested interest in the outcome: Boeing Co., the biggest beneficiary of the bank’s assistance."
Or nothing more than a criminal conflict of interest, which, once again, is at the expense of America's infinite bailout piggybank: it's taxpayers.
For months in 2012, according to about 50 pages of emails reviewed by The Wall Street Journal, the bank worked with Boeing to write rules that would satisfy critics in Congress and the domestic commercial airline industry—while leaving most sales of Boeing’s airplanes to foreign carriers unscathed.
Ex-Im Bank, which helps finance the purchase of U.S. exports through loans and guarantees, is the target of Republicans who want to kill it, in part because they say it mostly provides subsidies to America’s largest companies. The Boeing emails will add fuel to that fight.
The previously unreported documents, obtained through an open-records request, show how the two sides swapped ideas, drafts and data on sales of wide-body airplanes. Ex-Im Bank officials pushed their Boeing counterparts for information. Boeing suggested changes to the bank’s draft proposal.
They reveal an extraordinary level of coordination between public officials and corporate executives. In a message one Saturday morning, Bob Morin, then the bank’s head of aircraft financing, sent a plea: “If Boeing expects Ex-Im Bank to continue supporting wide-body aircraft, we need to get this right.”
This is how Boeing explained, or rather didn't, yet another corporate crony capture: "Officials at Boeing declined to comment on the emails. In general, said Tim Myers, president of Boeing Capital Corp., Boeing’s aircraft-financing unit, “it would be only natural” for the bank to ask for input since Boeing is the only U.S. maker of wide-body commercial aircraft."
Yes: it is only natural that the firm that benefits the most from the Ex-Im bank's generosity, be consulted, write the rules and regulations, and generally assure it continues to benefit, unsupervised and unchecked, from the same bank.
Much more in the full WSJ piece, but those who are easily disgusted or with high blood pressure are advised to stay away.
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You don't run your country and never have
We cheated some folks.
We negative tax rated some folks...
http://foreffectivegov.org/blog/boeing-second-largest-federal-contractor...
EURUSD broke below 1.05:
http://www.marketwatch.com/investing/currency/EURUSD/charts?ma=1&maval=1...
"Over the last six years, Boeing has reported $26.4 billion in pre-tax profits to its shareholders, while claiming a total of $105 million in refunds from the IRS, an effective tax rate of -0.4 percent."
If you look around the table and you're not writing the rules, you're the mark.
In Soviet America, authorities don't catch criminals, criminals catch authorities!
In Soviet America, ruler's name not Ben Dover, rulers tell you bend over.
Lets see. What is the definition of Fascism again?
Fascism is USSA
Fascism is back in fascion...
Also black in fascion. The oldfart skool crosswalk STOP sign holders have been wearing State Black as their uniform. Kind of disturbing.
Actually, K, that is more like an example than a definition. Still works tho.
Fascism is money and power before people, it's simple.
Fascism, by definition, is the merger between State and Corporation. We call it 'capitalism' here in the US...
This is not technically correct. Under Fascism, the State works hand in hand with Corporations, but the Corporations are separate from, and subsidiary to, the State.
What we have in this country today is more like a version of Communism, where corporate executives and politicians have simply merged into one Elite class. The Corporation itself becomes a meaningless entity, simply a privileged legal vehicle that is nominally owned by the "public" (the workers own the means of production...sound familiar?) that corporate executives and politicians work hand in hand to loot, via stock options, stock buybacks, the political contributions, and the public sector/private sector revolving door. Regulations are a by-product of this system, written by both wings of the elite (corporate executives and politicians) which are enforced by an ever-expanding opaque bureaucracy of apparatchiks, that ensure that the politically connected slowly annihiliate the politically unconnected. As competition is throttled, and the number of corporations is steadily reduced, eventually the means of production will become completely subsumed by the Elite, aka, the State. "Anarcho-Tyranny" is another, more modern word for it. The Chinese have perfected it, we are simply trying to imitate what they have been doing quite successfully since 1980.
And they pick/buy our leaders for us. Isn't that nice.
What is the next step?
The merger of government and big insider corporations at the detriment of the people is the definition of fascism.
There is no separate 'government' and 'big business' in the corporation UNITED STATES.
Americans were 'legally' turned into UNITED STATES citizens and you have no Constitutional rights now.
Research this for yourselves.
I'm making over $7k a month working part time. I kept hearing other people tell me how much money they can make online so I decided to look into it. Well, it was all true and has totally changed my life. This is what I do... www.globe-report.com
Just remember, you can't buy a congress-critter...you can only rent them...
It is cronyism or capitalism not crony capitalism
no you can have cronies in socialism and communism....it is most certainly crony capitalism.
Cronism is not a political entity.
new level of corruption.
They hate you for your freedom ROFL
Boeing forget to re-up WSJ advertising?
There are obviously well-funded forces against the Ex-Im Bank or it would not be an issue in Congress. That said, nothing will come of this article except another gauge of America's apathy toward government/corporate corruption.
I thought this was the new normal?
As it has always been...the corporation "helps" the regulator who is in an implied internship position for the corporation
Boeing planes come with US immigration rights too, that's why domestics are pissed, foreign carreirs get an invasion subsidy
“it would be only natural” for the bank to ask for input since Boeing is the only U.S. maker of wide-body commercial aircraft."
Yeah. About that.
Not so long ago there were several airliner manufacturers.
A few years before that there were dozens.
Starting from the 40's to the present it seems that innumerable airliner companies merged into fewer, and fewer, and fewer, until there was one.
See that Boeing deal?
That's why.
What did you think "regulation" was for?
Didn't a an ex-Big Pharma employee draft (with a little help from her friends) the Obamanation known as Obamacare?
The question is how much the IM Bank has had to pay out to Boeing when foreign vendors did not pay? That is the crucial bit of info. Are the insurance fees that Boeing pays to particpate creating losses for IM? In my experience IM does not have many defaults and eases the ability to do business with foriegn suppliers so I really have no problem with the program. I think those that do don't really know what the program is all about.
Prudent Financial Management
Let’s see:
1 Invoke a terrifying internal and external enemy
2 Create a gulag
3 Develop a thug caste
4 Set up an internal surveillance system
5 Harass citizens' groups
6 Engage in arbitrary detention and release
7 Target key individuals
8 Control the press
9 Dissent equals treason
10 Suspend the rule of law
I think we're done here!
".....'it's a small club and the american taxpayer ain't in it."
Between 2008 and 2010, a dozen major US corporations—including General Electric, ExxonMobil, and Verizon—paid a negative tax rate, despite collectively recording $171 billion in pretax US profits, according to an analysis by Citizens for Tax Justice. Taken together, these companies' tax burden was -$2.5 billion, and ten of the companies recorded at least one no-tax year between 2008 and 2010. Boeing negative rate .. .01 percent ..............tax reform .. bankers would never allow that and neither would major corps . they make out too well under the current system . so when I hear the whining about a 35 percent rate for corporations .. only if they are dumb as a bag of rocks and have their accounting done by primary school students... lets face it . .. the WEST is owned by a corporate and banking cabal and short of massive revolt nothing will change.. World War III might do it.
BS. It's not the US taxpers.......yet. When the world get's off it's US$ high horse then it will be us.
Morons - the purpose of the Ex-Im bank is to promote American exports. That's why it was created. If you don't like the fact that we have one, write your Congressman. How could they promote American exports without working with America's exporters?
If you think European governments aren't subsidizing AirBus exports - your confused.
These fucks don't even know what the EX-IM bank does.
Ah, yes. Those of us with relatives in the Industry are VERY aware of the US / Boeing (in particular) bitching about "under the counter subsidies" for Airbus Industries.
In the meantime, it was "Perfectly OK" for the ENTIRELY STATE FUNDED NASA to do "development work" that, funny enough, DIRECTLY benefited the likes of Boeing / McD-D, etc. - "No subsidy there" of course!
Hypocrisy much?? - "The American Way". That's why you've lost friends, and are very fast losing influence.
Is it your preference that NASA do work that directly benefits foreign companies instead? It certainly is a subsidy. Public transit is a subsidy. Stations are located near some businesses and away from others; it benefits businesses and citizens unequally. The GM bailout was a subsidy. It benefited union members and stole from bond-holders, which included pensioners and 401K's. If you're saying that the government shouldn't be in the subsidy business - that's OK with me - but that's going to be a big root canal. The problem with this article and most of the comments is the foaming at the mouth about uncovering the conspiracy of the Ex-Im bank working with exporters. That's not a dark secret - that's the reason the Ex-Im bank was created. "Look - we caught them doing what they were hired to do! We have the e-mails!!!"
SLAUGHTER
this is exactly how the business works.
the only thing wrong here is ex-im being backed by the taxpayer.
Air travel: extinct for the 99% for 2035?
If the Military / MIC get the WW3 they are so desperately lobbying for, "air travel" will be the least of the survivors' problems (unless it's a case of migratory birdlife bringing in a host of "new" doseases, just when the Global health infrastructure / surveillance system is no more . . . . .)
It's not crony capitalism! it's crony socialism! Get it right.