Last week we got another opportunity to see the thinking of the very rich when Jeffrey Immelt, the CEO of General Electric, complained at a summit with African heads of state and business leaders that there is even an argument over the reauthorization of Export-Import Bank. According to the Washington Post, Immelt said in reference to the Ex-Im Bank reauthorization, the fact that we have to sit here and argue for it I think is just wrong. To get some orientation, the Ex-IM Bank makes around $35 billion a year in loans or loan guarantees each year. The overwhelming majority of these loans go to huge multi-nationals like Boeing or Mr. Immelts company, General Electric. The loans and guarantees are a subsidy that facilitates exports by allowing these companies and/or their customers to borrow at below market interest rates. As a practical matter, whether the bank is reauthorized or not will have no noticeable impact on the economy. If the government took away the subsidy on this $35 billion in exports, it would probably lead to a decline of between 10 and 30 percent in these exports ($3.5 billion to $10.5 billion), while costing Boeing, GE, and the rest some of their profit margin on the portion they continued to export.
Posted on: Sat, 16 Aug 2014 03:47:30 +0000
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