This website has consistently railed against the U.S. Export-Import Bank – which has become little more than a taxpayer-backed loan program for aircraft manufacturer Boeing.
Hence its nickname “Boeing’s Bank …”
But Timothy Carney of The Washington Examiner has been all over this crony capitalist giveaway from the get-go … and he’s filled in another chapter with his latest report on the controversial “bank.”
According to Carney, a looming global slowdown in aircraft orders could mean big trouble for the “Ex-Im” bank, which is “heavily exposed to Boeing’s customers.”
Yikes. That’s especially worrisome news for South Carolina – which has bet big on Boeing with borrowed taxpayer dollars.
Carney’s column raises an even more fundamental point, though …
“Should we have a government program that is mostly dedicated to helping one company?” he writes.
Hell no. Especially not when that program gives foreign airlines a competitive advantage over domestic carriers – which reduces competition for routes and ultimately raises costs for consumers.
“Congress has a choice between American free enterprise and Boeing,” Carney concludes, referring to this year’s vote on Ex-Im reauthorization.
Let’s hope (for once) Congress chooses wisely … but we’d advise against holding your breath.
9 comments
It only makes sense that this could be the case. The similarities between the Fed fueled housing bubbles, like easy(taxpayer supported) money and dubious loan applicants, seem to abound.
Of course, if the whole thing takes a shit they’ll bail out the wealthy people with taxpayer money-taken from the little people, but hey, you gotta break a few eggs…
On the bright side, the currency they’re being bailed out with is going to become worthless if they keep it up.
crony capitalist giveaway
——-
socialist!
Interesting considering the latest Commerce Department report showed a 13% increase in aircraft-related demand that was largely responsible for the 2.2% growth rate for the month.
Pulling a Lazenby…Fits and Tim Carney…all Gen X’ers, will not help you understand the world around you. We live in the Age of Information not Aquarius. If you do not do your due diligence and research all aspects of a position, then you three stooges assume something to be true. When you assume, you make an ASS of U and Me. Please, research your fucking topics before you assume. A casual Google search for “Import-Export Bank Boeing” will give you at #6, this reality:
“All credits require varying degrees of Ex-Im support,” he said. “We need to be mindful we are in a global market, and if we want to be successful in a global market, we need to be mindful about the rules of the global market.”
Already private banks have a decreasing ability to finance the rapidly rising volume of aircraft sales — which Boeing estimates at $4.8 trillion over the next 20 years — and that is catalyzing a rise in leased aircraft.
While in 1980 just 1.7 percent of global commercial aircraft were leased, last year that figure was 38 percent and it’s expected to rise to more than 50 percent leased by 2020, according to a chart that Zolutusky presented to the group.
“Probably over the next five to seven years, as regulation of banking is formalized, there will be less banking in general,” he said, “and less commercial banking available for aircraft.”
He pointed to the former McDonnell Douglas, a former Boeing competitor that was later acquired by Boeing Co. (NYSE:BA), as an example of a company that put its money into financing sales, but not research, and faded away after its models were no longer competitive.
Could Boeing finance its own aircraft sales?
“Yes, we can, but if we do, we don’t have resources to invest in research and development. You can do one, or the other,” Zolotusky said. “Our success to date is entirely built around technological innovation.”
http://www.bizjournals.com/seattle/news/2013/08/07/boeing-will-needs-ex-im-bank-to.html?page=all
Pure tripe. It’s all a guessing game. Just like the reality of continually adjusted CBO projections.
Aircraft is a depreciating asset. They must be replaced. Kind of like your brain on alcohol only the more it depreciates the more you can expect unrealized gains.
“Aircraft is a depreciating asset.”
Yea? So what. You assume the debtors have the ability to pay…that same fact is why if debtors start defaulting the US taxpayer takes it up the ass.
Look at the risk here for 3400 jobs:
http://www.stuff.co.nz/business/world/9865930/Gina-Rinehart-Corporate-welfare-queen
It’s pure lunacy, just like Fannie Mae/Freddie Mac.
I read your link.
“Commercial banks and bond investors were reluctant to shoulder all the risk.”
The 2008 Dodd-Frank Wall Street Reform and Consumer Protection Act is chilling commercial lending. From mortgages to small business loans, implemented rules this year and ongoing rules making is changing commercial banking…for the worse. Dodd-Frank was another one of those disasterous laws passed when Democrats held all three branches. The Volcker Rule alone is 800 pages. To make matters worse, besides Congress punting the rules making from the actual bills and giving their consent to write legislation to partisan bureaucrats on rules making committees, their is only one recourse to challenge rules: the D.C. Circuit Court of Appeals. Using the nuclear option, Sen Reid (D-NV) appointed three partisan Democrat judges earlier this year. Going to the Ex-Im Bank is the new normal. Deals like Rinehart received, unless challenged, is only the beginning. You can bet that Dodd-Frank and Obamacare both Democrat signature domestic policies will reach out and screw you and me. The only alternative is to shut down the Ex-Im Bank.